Google engineer charged in New York over $1.2m Polymarket insider betting scheme

An Italian software engineer living in Switzerland has been arrested and charged in New York with using privileged access to confidential Google search data to place lucrative bets on the prediction platform Polymarket, netting more than $1.2 million. Michele Spagnuolo, 36, appeared before a federal judge last week after being taken into custody on charges of commodities fraud, wire fraud and money laundering. The case, brought by the US attorney for the Southern District of New York, marks the second insider-trading prosecution linked to Polymarket in recent months, signalling a sharpened focus from American prosecutors on digital betting platforms.

According to the criminal complaint, Spagnuolo exploited an internal Google tool late last year to examine the company’s closely guarded top-trending searches for 2025. He then staked millions of dollars across a series of bets on whether various celebrities would rank among the most-searched people that year — wagers he placed weeks before Google publicly released its annual Year in Search summary. One of the trades, detailed in the indictment, involved the singer D4vd. Crucially, prosecutors allege that Spagnuolo knew the outcomes in advance because of the non-public data he accessed, putting ordinary counterparties at a disadvantage.

Viewed from Washington, the prosecution underscores an expanding effort to police insider dealing on blockchain-based prediction markets, which have attracted a global user base and growing liquidity. The defendant’s circumstances — an Italian citizen resident in Switzerland, employed by an American technology giant, and apprehended in New York — highlight the extraterritorial reach US authorities are willing to assert. Analysts in London note that the case could test the boundaries of traditional insider-trading statutes when applied to contracts and wagers that fall in a regulatory grey area between gambling and securities. Google, which cooperated with the investigation, said through a spokeswoman that it maintains strict policies against misusing internal data.

The prosecution arrives as Polymarket, like other crypto-adjacent platforms, faces heightened scrutiny from regulators on both sides of the Atlantic. The alleged scheme — running from October to December — exploited the gap between data generation and public release, a window that is intrinsic to many tech firms’ annual retrospectives. With European authorities also debating how to classify and supervise prediction markets, legal experts foresee a wave of test cases that will shape the sector’s future. For now, Spagnuolo’s arrest sends an unmistakable signal: American prosecutors are prepared to pursue alleged insider trading across borders, treating digital platforms with the same gravity as traditional exchanges.