A google information security engineer, Michele Spagnuolo, has been charged with multiple crimes, including commodities fraud, wire fraud, and money laundering. The allegations suggest he exploited confidential data from Google to place calculated bets on Polymarket, a crypto-based predictions platform, resulting in a profit of approximately $1.2 million.
The complaint, unsealed on May 27, 2026, describes the arrest of Spagnuolo, 36, an Italian citizen living in Switzerland. He was apprehended in New York and appeared in front of US Magistrate Judge Sarah Netburn. Following his appearance, he was released on a $2.25 million bond, which included $1 million in cash, as stated by the Department of Justice (DOJ). During the proceedings, he did not enter a plea.
How the Scheme Operated
According to the unsealed complaint, Spagnuolo had unique access to a confidential Google software tool, which displayed user search trends across its platform. This information also contributed to Google’s annual “Year in Search” rankings.
Starting from May 2024, Spagnuolo opened a Polymarket account and began wagering on contracts related to who would be among the most-searched individuals on Google in 2025. These specific markets were introduced by Polymarket the previous autumn.
Prosecutors assert that Spagnuolo transferred around $3.8 million in USDC to his Polymarket account and made numerous significant bets, including a wager of $381.12 predicting that the artist d4vd would make the most-searched list. He reportedly also made accurate predictions on market contracts such as “Will Zohran Mamdani rank in the Top 5 most searched” and “Will Squid Game be the number one searched TV show,” as detailed in CNBC’s reporting. His success in these markets seemed to stem from prior knowledge of outcomes.
Additionally, the Commodity Futures Trading Commission (CFTC) has pursued a civil case against Spagnuolo, seeking monetary penalties, restitution, and other sanctions. Google has placed Spagnuolo on administrative leave and is cooperating with ongoing investigations. The company noted that while the software tool was accessible to all employees, leveraging confidential information for personal gain violated company policy, as mentioned in a statement reported by ABC News.
Another Case of Insider Trading
Spagnuolo’s arrest follows another recent federal case linked to insider trading on Polymarket. In April 2026, Gannon Ken Van Dyke, a Master Sergeant in the US Army, was arrested for allegedly using classified military information regarding plans to apprehend Venezuelan President Nicolás Maduro to make bets on Polymarket, reportedly amassing over $400,000. Van Dyke has since pleaded not guilty, according to CNN’s coverage.
Olivia Chalos, the chief legal officer of Polymarket, stated that the company has collaborated with the US Attorney’s Office and the CFTC regarding the Spagnuolo case. She emphasized that Polymarket is the only prediction platform that has cooperated leading to insider trading charges in the United States, and the blockchain technology behind their platform creates a traceable record of activities.
This incident signals a pivotal moment for the emerging field of prediction markets. With two federal insider trading arrests occurring within thirty days—one involving military secrets and the other corporate data—combined with a congressional inquiry into both Polymarket and Kalshi, it highlights a tightening legal framework around prediction markets. The transparent nature of blockchain trading, previously seen as a user benefit, is increasingly becoming a tool for federal investigations.
Cover image sourced from Grok; ETHUSD chart provided by TradingView.
