Google Insider Hacked Polymarket: Stole $1.2M in Secret Search Data!

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Polymarket trader accused of making $1.2M using Google insider data

A Google software engineer has been accused of illegal insider trading involving prediction markets. This action comes as U.S. regulators increase their oversight of platforms like Polymarket, which allow users to trade on the outcomes of future events.

Summary

  • U.S. prosecutors and the CFTC have charged a Google engineer over alleged insider trading tied to Polymarket bets.
  • Authorities said the trader used unreleased Google search trend data to place $2.7 million in prediction market wagers.

Google employee Michele Spagnuolo is accused of illegally using secret company data to make bets on Polymarket before Google revealed its predictions for 2025 search trends, according to the U.S. Department of Justice.

According to U.S. Attorney Jay Clayton, a Google employee is accused of making over $1.2 million by illegally using private company information to trade on a prediction market. Clayton stated that anyone within a company who uses confidential information for personal financial gain will face prosecution.

— US Attorney SDNY (@SDNYnews) May 27, 2026

According to prosecutors, the trading activity earned about $1.2 million in profits. This happened through an account on Polymarket called “AlphaRaccoon.”

Newly released court documents revealed that Spagnuolo allegedly made $2.7 million worth of bets – a total of 25 – on events related to Google’s expected list of top search terms for 2025. Prosecutors argue these bets were placed on outcomes that people using the Polymarket platform previously considered improbable, before Google revealed its rankings in December.

In addition to the criminal charges, the Commodity Futures Trading Commission also filed a civil lawsuit against Spagnuolo, alleging he illegally used inside information to trade commodities. The agency stated this case is part of a larger effort to monitor and prosecute illegal activity in prediction markets that involve confidential data.

In a statement from the Justice Department, Manhattan U.S. Attorney Jay Clayton explained that the charges are meant to show that people with inside knowledge of a company can’t illegally profit from that information in the stock market.

Government agencies are now paying closer attention to the possibility of illegal insider trading happening in prediction markets. Several members of Congress recently asked the CFTC why it hadn’t taken stronger action against unusual trading activity related to predictions about events in Iran and Venezuela.

In a letter to CFTC Chair Michael Selig last April, several lawmakers expressed strong disapproval of certain event contracts, calling them “morally obscene.” They were particularly concerned that trading related to potential U.S. military operations might involve the improper use of confidential information. The lawmakers also cautioned that a lack of strong regulatory oversight could erode trust in the financial sector.

CFTC increases pressure on prediction markets

The Commodity Futures Trading Commission (CFTC) appears to be taking a tougher stance on enforcing regulations. In April, the agency’s Enforcement Director, David Miller, clarified that laws against insider trading *do* apply to prediction markets, dismissing online suggestions to the contrary.

.@CFTC Charges Google Employee with Insider Trading in Search Result-Related Event Contracts:

— CFTC (@CFTC) May 28, 2026

Miller reiterated on Wednesday that the enforcement division continues to actively monitor and police illegal insider trading in prediction markets and all other markets overseen by the agency.

In December, people on Discord and X started to suspect that the online account “AlphaRaccoon” was being used by someone at Google. Court documents show that after these suspicions became public, the account name was changed to a cryptocurrency wallet address.

Investigators claim the money linked to the Polymarket account was then transferred using a crypto exchange and a privacy service designed to hide blockchain transactions.

The Justice Department accused Spagnuolo of several crimes, including fraud related to commodities, wire fraud, and laundering money. If convicted on all counts, he could face up to 50 years in prison, according to prosecutors.

In my research, I’ve found that the CFTC is pursuing a civil case aiming to recover funds, impose financial penalties, and permanently prohibit the defendants from trading and registering as market participants. Essentially, they’re seeking to make things right, penalize wrongdoing, and prevent future violations.

This legal challenge comes amid an ongoing dispute between federal and state authorities about how prediction markets should be regulated in the U.S. Just recently, the Commodity Futures Trading Commission (CFTC) sued Minnesota after the state passed a law prohibiting prediction markets starting August 1st. The CFTC maintains that these markets should be overseen as financial derivatives at the federal level, not treated as simple gambling by individual states.

The White House is currently reviewing a new rule proposed by the Commodity Futures Trading Commission (CFTC) regarding prediction markets. This proposal, which follows public feedback – over 3,000 comments were received – addresses important issues like preventing insider trading, ensuring market security, and establishing clear legal guidelines for these types of contracts, as crypto.news previously reported.

These discussions are becoming increasingly important because platforms like Polymarket and Kalshi are being sued and investigated by several states, including Nevada, New Jersey, Maryland, Ohio, Montana, Illinois, and Minnesota.

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2026-05-28 10:33