提前看答案再交卷？Google工程师身陷Polymarket内幕交易案
- Core Insight: A Google security engineer has been accused of using internal company search data to illegally profit over $1.2 million on the prediction market Polymarket. This case highlights the deep risks of insider information trading and compliance scrutiny within prediction markets.
- Key Elements:
- Incident Core: Google security engineer Michele Spagnuolo used internal tools to view data on the most searched people in 2025 and traded related markets, including that of singer D4vd, through linked Polymarket accounts, profiting over $1.2 million.
- Legal Charges: US prosecutors charged him with trading on material non-public information, involving counts of commodities fraud, wire fraud, and money laundering. Funds were ultimately transferred to his Italian personal accounts via privacy tools.
- Data & Trading Link: Prosecutors built a complete chain of evidence by correlating internal tool access logs, trading timestamps, on-chain fund flows, and the use of privacy tools, proving he profited from non-public information.
- Polymarket Compliance Pressure: This case pushes Polymarket into regulatory "deep waters." The platform, already facing bans in countries like Spain and Indonesia, is now required to strengthen KYC measures to address scrutiny over trade origins and information sources.
- Industry Impact: This case signals an escalation in prediction market regulation, shifting the focus from "whether trading is allowed" to "who is trading and based on what information." The platform's transparent and traceable nature ironically becomes a tool for regulators.
Original by Odaily Planet Daily (@OdailyChina)
Author: Asher (@Asher_0210)
The biggest fear in prediction markets isn't that someone makes an accurate bet, but that someone knows the answer in advance.
Recently, the U.S. Attorney's Office for the Southern District of New York released charging documents stating that Google security engineer Michele Spagnuolo allegedly used internal company tools to view data related to the most searched individuals of 2025, and traded on the corresponding markets on Polymarket through a linked account, eventually profiting over $1.2 million. Spagnuolo has been arrested and indicted on charges of commodities fraud, wire fraud, and money laundering.
A Google Engineer Targeted the Search Ranking Market
The starting point of this case was prediction markets on Polymarket related to Google Search results. These markets predict whether certain individuals will appear on the list of most searched people in 2025. For ordinary traders, this is a judgment call on trends and popularity, but Spagnuolo's identity made the situation sensitive.
The charging documents show that Spagnuolo, a Google security engineer, had access to internal company tools to view relevant search data. Subsequently, a linked account named AlphaRaccoon began buying on Polymarket. This account had transferred approximately 3.8 million USDC to a Polymarket address and participated in multiple prediction markets related to Google Search results.
The most critical trade targeted singer D4vd. Spagnuolo used Google's internal tools to see that D4vd's search volume was rising. Hours later, the AlphaRaccoon account traded on Polymarket, betting that D4vd would become one of the most searched individuals in late November.
This is the core of the prosecution's case. An ordinary user buying D4vd is a bet on news buzz and social media discussion. But if a trader has just viewed internal Google search data before trading the corresponding market, the trade is no longer just a prediction of a trend. Prosecutors allege that Spagnuolo traded using material non-public information and profited over $1.2 million through these operations.
From Polymarket to an Italian Account, the Flow of Funds Emerges
After profiting from the trades, the flow of funds also came under the scrutiny of the prosecution.
The charging documents show that AlphaRaccoon subsequently transferred 5 million USDC.e from its Polymarket account to a wallet. The funds were then moved through exchange services and privacy tools, with a portion eventually landing in an account at a payment processing institution in Italy. Prosecutors state that this account was opened using Spagnuolo's own identification documents.
In other words, the prosecution didn't just identify an account with abnormal profitability on Polymarket; they connected the dots: internal tool access logs, trade timing, on-chain transfer pathways, privacy tool usage, and the real-world bank account that ultimately received the funds.
Google Says: Cooperating with Law Enforcement Investigation, Spagnuolo Suspended
Google responded, stating that the company is cooperating with law enforcement and has suspended Spagnuolo.
A Google spokesperson stated that the employee used tools accessible to all company employees to view relevant marketing materials, but using such confidential information for trading is a serious violation of company policy, and the company will take appropriate action.
Prosecutors further alleged in the charging documents that Spagnuolo not only traded on Polymarket using material non-public information but also transferred the profits through wallets, exchange services, and privacy tools in an attempt to conceal the source and ownership of the proceeds.
Polymarket's Compliance Pressure Deepens
The impact of this case extends beyond the arrest of a single Google engineer.
Recently, Polymarket has faced controversies primarily related to regional access and regulatory classification. The Spanish government issued a preemptive ban against Polymarket, citing the platform's operation without a gambling license. Indonesia's Ministry of Communication and Digital Affairs also blocked Polymarket, classifying it as an illegal online gambling platform.
Now, pressure is mounting on the trades themselves. According to The Information, Polymarket is pushing for KYC identity verification for traders to mitigate potential sanctions and legal risks. Meanwhile, some users continue to trade via automated trading bots, Telegram tools, and grey-market pathways, making it increasingly difficult for the platform to avoid a key question: who is actually behind these trades?
In response to regulatory scrutiny, Polymarket's answer emphasizes cooperation and traceability. The platform stated that it is cooperating with U.S. prosecutors and the CFTC, and noted that blockchain transactions are transparent and traceable.
In this context, the Spagnuolo case serves as a signal. The risk for prediction markets is no longer just about "whether users can be allowed to trade on a certain event." As market size grows and traders become more sophisticated, the real question is whether the platform can prove that trade sources, fund flows, and information origins can withstand scrutiny.
Polymarket can still tell the story of "trading probabilities," but regulators are asking a more specific question: behind those probabilities, who exactly is trading, and what information are they using to trade with?
