A Google security engineer has been charged with crimes stemming from allegedly placing trades on Polymarket using confidential internal information from the tech giant, according to ABC News. Michele Spagnuolo, a 36-year-old Italian citizen, was arrested this morning in New York.
What happened
Spagnuolo faces one count each of commodities fraud, wire fraud, and money laundering. Employed by Google since 2014, he worked out of the company’s Zurich, Switzerland, offices. The complaint details that Spagnuolo engaged in trading on Polymarket from October 2025 to December 2025, utilizing internal Google data.
In one instance, Spagnuolo netted $1.2 million by correctly predicting the most-searched person of the year would be D4vd, an obscure singer implicated in a murder case. “Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did,” FBI agent Brandon Racz wrote in the complaint.
Why it matters
This case marks the second known arrest in the United States involving illicit activity on prediction markets. It highlights the ongoing scrutiny of platforms like Polymarket, which have garnered criticism for facilitating illegal trades. Lawmakers are increasingly investigating these platforms and their regulatory practices.
Background
On April 20, 2026, a U.S. Army special forces officer was arrested for allegedly betting on markets related to the capture of former Venezuelan leader Nicolás Maduro. This incident, along with Spagnuolo’s case, has raised concerns among regulators about the integrity of prediction markets.
What’s next
Authorities continue to investigate the Polymarket platform, with House Committee on Oversight and Government Reform chairman James Comer launching an investigation into insider trading on such platforms. Polymarket is expected to provide information on its customer vetting processes to lawmakers.
