Betting on Polymarket is supposed to be a fun, low-intensity gamble whereby you buy 'yes' or 'no' shares for the outcome of a real-world event and hope to correctly predict how it resolves — at which point your winning share pays out $1 and your losing one pays nothing.
That is, unless you are an employee at Google and federal prosecutors allege you already know the answers — in which case it could amount to insider trading, one of the most aggressively prosecuted white-collar offences on the books that can carry a maximum prison sentence of 20 years.
According to the US Attorney for the Southern District of New York, Michele Spagnuolo, a staff software engineer at Google, allegedly used his employer's most confidential annual trend data compilation to pocket more than $1.2 million (€1.1mn) on Polymarket. His alias was known as “AlphaRaccoon.”
Spagnuolo has now been charged with commodities fraud, wire fraud and money laundering by federal prosecutors in New York.
The Spagnuolo case is the second high-profile prosecution for insider trading on a prediction market in just over a month, part of a largely unexplored legal frontier as prosecutors grapple with how existing fraud and commodities law applies to platforms like Polymarket, which operate nothing like a traditional stock exchange.
