When the story first broke last December, the question was whether a Polymarket user who’d just cleared more than $1 million betting on Google’s Year in Search results was a Google insider. And if so, could anyone do anything about it?
The federal government has brought a case that could answer both questions.
On Wednesday, the U.S. Attorney’s Office for the Southern District of New York unsealed a criminal complaint against Michele Spagnuolo, a.k.a “AlphaRaccoon,” charging him with commodities fraud, wire fraud, and money laundering. The Commodity Futures Trading Commission (CFTC) filed a parallel civil complaint the same day, seeking restitution, penalties, and trading bans.
“As I have said repeatedly, the Commission will not tolerate fraud, manipulation, or insider trading, regardless of the technology or platform that is used,” CFTC Chairman Michael S. Selig said in a statement. “Today’s action further underscores our commitment to rooting out insider trading and promoting market integrity in prediction markets.”
According to the criminal complaint, Spagnuolo, a software engineer at Google since 2014, accessed Google’s confidential internal Year in Search data on Oct. 15, 2025, using a tool whose interface, the FBI noted, “bore a banner that stated, in part, ‘Google Confidential’ in red text.” The next day, the AlphaRaccoon account placed its first Year in Search bets.
Between Oct. 15 and Dec. 4, the complaint states, Spagnuolo risked approximately $2.75 million across roughly 25 contracts the market considered unlikely to occur. He bet $937,688 against Bianca Censori being the No. 1 searched person. Another $613,587 against Pope Leo XIV taking the top spot. And $509,149 against Donald Trump being No. 1.
And after checking the internal data on Nov. 27 and seeing d4vd had quietly overtaken Kendrick Lamar at the top of Google’s list, he placed bets on d4vd making the top five and being the No. 1 searched name at implied odds barely above zero.
When Google officially announced the results on Dec. 4 (after the site briefly went live five to six hours early, was caught, taken down, and republished) the AlphaRaccoon account allegedly made a profit of about $1.2 million.
“Employees who are entrusted with confidential business information cannot misappropriate that information for personal financial gain,” CFTC Director of Enforcement David I. Miller said.
How they caught him
Spagnuolo’s effort to cover his tracks is laid out in the complaint. After the markets resolved, he moved roughly $5 million in cryptocurrency out of his Polymarket account into a wallet investigators say was controlled by the same person, then ran it through a series of swaps and a service that, per the complaint, “holds itself out as a service which adds privacy protection to cryptocurrency transactions.”
The link to his name came from earlier transactions. In November, before the markets resolved, about $149,980 moved from that same wallet through a swapping service to a cryptocurrency payment processor account opened in Spagnuolo’s name, where he used his Italian government ID card.
Around the same time, after Discord and X users began speculating publicly that AlphaRaccoon was a Google insider, the AlphaRaccoon username vanished from the Polymarket account, reverting to an anonymous string of characters.
Blockchained
Spagnuolo is not some schlub who stumbled into a search trends database. According to his LinkedIn profile, he is a staff information security engineer at Google Zurich, where he leads the company’s Agent and Web Observability area within the Information Security team. He co-authored “strict-dynamic,” part of a web security specification that he said protects more than a third of the internet’s HTML traffic against a common form of attack.
He also, according to the same profile, created BitIodine, which he describes as “the first open-source Bitcoin blockchain analysis framework,” cited in roughly 500 academic publications. He lists “extensive technical experience in blockchains” and notes that he has served as an expert witness in legal cases involving them.
In other words: The man charged with using cryptocurrency to launder insider-trading proceeds is the author of an early open-source Bitcoin blockchain analysis tool, which is basically what investigators used to catch him.
