Author: Stephen Katte

Translated by: Deep Tide TechFlow

Deep Tide Guide: On the same day, the U.S. Department of Justice and the CFTC filed a lawsuit against a Google software engineer, accusing him of using undisclosed internal data from Google to make precise bets on Polymarket, profiting $1.2 million. This is the second federal charge in the prediction market field triggered by insider information, coinciding with Congress's recent launch of an insider trading investigation into Polymarket and Kalshi last week.

U.S. authorities have brought criminal charges against a Google employee for using company insider information to bet on Polymarket, profiting $1.2 million.

The Department of Justice announced on Wednesday that it has unsealed charges against Google software engineer Michele Spagnuolo, alleging that he accessed undisclosed internal information from Google and then placed 25 bets on Polymarket related to the "most searched person on Google in 2025," with a total investment of $2.7 million.

Prosecutors said Spagnuolo had a Polymarket account named "AlphaRaccoon." When Google released its annual list of trending search figures last December, that account profited $1.2 million on "results that the market considered unlikely to happen."

On the same day, the Commodity Futures Trading Commission (CFTC) filed a civil lawsuit against Spagnuolo with consistent accusations.

The issue of insider trading in prediction markets is attracting increasing regulatory attention. Last Friday, the U.S. Congress launched an investigation into Polymarket and Kalshi, questioning how the two platforms responded to incidents of insider trading, with lawmakers worried that government officials are profiting by betting using insider information.

Manhattan U.S. Attorney Jay Clayton stated in a statement that these charges "reinforce a decades-old message: corporate insiders must not profit in the market using confidential business information."

Caption: Source Federal Prosecutor's Office for the Southern District of New York

Account "AlphaRaccoon" Renamed Afterwards

Court documents show that in December of last year, discussions began in communities on Discord and X about AlphaRaccoon possibly being a Google insider. Shortly thereafter, the username was changed to a wallet address.

The prosecution also alleges that funds in the AlphaRaccoon account were transferred to a decentralized cryptocurrency exchange service and then to an unnamed transfer service that provides blockchain transaction privacy protection.

The Department of Justice has charged Spagnuolo with three counts: commodity fraud, telecommunications fraud, and money laundering, with a maximum penalty of 50 years in prison.

The CFTC, in its civil lawsuit, seeks restitution, forfeiture of illegal gains, civil penalties, as well as trading and registration bans.

CFTC Division of Enforcement Director David Miller stated in a press release, "The enforcement division is rigorously overseeing the abuse of insider information in prediction markets and other markets under CFTC jurisdiction."

Caption: Source CFTC

This is the second recent federal insider trading case in the prediction market field. In April of this year, the Department of Justice just charged a U.S. soldier for using confidential information to bet on the capture of former Venezuelan President Nicolás Maduro on Polymarket.