提前看答案再交卷？Google工程师身陷Polymarket内幕交易案

Original by Odaily (@OdailyChina)

Author: Asher (@Asher_0210)

The biggest fear for prediction markets isn't someone making accurate bets, but someone knowing the answers in advance.

Recently, the U.S. Attorney's Office for the Southern District of New York released indictments stating that Google security engineer Michele Spagnuolo allegedly used internal company tools to view data related to the most searched people in 2025 and traded on corresponding markets via linked accounts on Polymarket, ultimately profiting over $1.2 million. Spagnuolo has been arrested and charged with commodities fraud, wire fraud, and money laundering.

A Google Employee Set His Sights on Search Rankings Markets

The starting point of this case involves 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 about trends and traffic, but Spagnuolo's identity made the matter sensitive.

Criminal complaints show that Spagnuolo, as a Google security engineer, could use internal company tools to view relevant search data. Subsequently, a linked account named AlphaRaccoon began buying on Polymarket. This account transferred approximately 3.8 million USDC to a Polymarket address and participated in several prediction markets related to Google Search results.

The most critical trade targeted singer D4vd. Spagnuolo allegedly saw D4vd's search volume rising via Google's internal tools. Hours later, the AlphaRaccoon account traded on Polymarket, betting that D4vd would be one of the most searched people in late November.

This is the core of the prosecution's case. An ordinary user buying D4vd wagers on news hype and social media chatter; but if a trader has just viewed internal Google search data before trading the corresponding market, that trade is no longer just about spotting a trend. Prosecutors allege that Spagnuolo traded using material non-public information and made over $1.2 million through these operations.

From Polymarket to an Italian Account: The Money Trail Emerges

After profiting from trades, the flow of funds also came under scrutiny.

Court documents show that AlphaRaccoon subsequently transferred 5 million USDC.e from its Polymarket account to a wallet, after which the funds were moved through exchange services and privacy tools, with a portion eventually landing in an account at an Italian payment processing institution. Prosecutors state that this account was opened using Spagnuolo's own identification documents.

In other words, the prosecution didn't just find an unusually profitable account on Polymarket; they connected the dots between internal tool access logs, trade timings, on-chain transfer paths, the use of privacy tools, and the real-world account that ultimately received the funds.

Google Says: Cooperating with Law Enforcement, Spagnuolo Suspended

Google responded, stating it is cooperating with law enforcement investigations and has suspended Spagnuolo from his position.

A Google spokesperson said 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 indictment that Spagnuolo not only traded on Polymarket using material non-public information but also transferred funds through wallets, exchange services, and privacy tools after profiting, attempting to conceal the source and ownership of the gains.

Polymarket's Compliance Challenges Intensify

The impact of this case extends beyond the arrest of one Google engineer.

Recently, Polymarket has faced controversies more centered on regional access and regulatory classification. The Spanish government issued a preemptive block 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 traders towards KYC identity verification to mitigate potential sanctions and legal risks. Meanwhile, some users continue to trade via automated bots, Telegram tools, and gray-market channels, making it increasingly difficult for the platform to sidestep the question: who is actually making these trades?

In response to regulatory scrutiny, Polymarket emphasizes cooperation and traceability. The platform states it has worked with U.S. prosecutors and the CFTC, noting that blockchain transactions are transparent and traceable.

Against this backdrop, the Spagnuolo case serves as a signal. The risk for prediction markets is no longer just about "whether users can bet on a certain event." It's about, as market size grows and trader sophistication increases, whether the platform can prove that trade origins, fund flows, and information sources 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?