A Google software engineer has been charged with insider trading after allegedly using confidential search data to make almost $1.7 million betting on prediction market platform Polymarket.

The US Department of Justice has charged Michele Spagnuolo, an Italian citizen living in Switzerland who has worked as a software engineer at Google for more than a decade, of using confidential business information to make money trading on the cryptocurrency-based platform.

Polymarket allows users to wager on real-world events by buying shares in "yes" or "no" outcomes, covering topics ranging from elections and sporting events to conflicts and economic developments.

The platform has long faced scrutiny over concerns that traders with privileged information could manipulate markets.

A US army soldier was recently charged with using insider knowledge of a military operation in Venezuela to make $US400,000 ($558,000) on the platform.

Insider search data

Prosecutors allege Spagnuolo placed bets worth more than $3.7 million on markets related to Google’s 2025 Year in Search using confidential internal data about the most-searched celebrities.

When Google later released information publicly and the markets were settled, Spagnuolo allegedly collected more than $US1.2 million ($1.7 million).

“As alleged, Spanguolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $US1.2 million in trading profits on Polymarket,” US Attorney for the Southern District of New York Jay Clayton said in a statement.

“Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.

“Michele Spagnuolu allegedly abused his elevated access to confidential trends to place bets with non-public information and receive more than one million dollars in unlawful profits.”

Spagnuolo has been charged with commodities fraud, wire fraud and money laundering.

The alleged bets were placed between October and December 2025, under a Polymarket account named “AlphaRaccoon”.

Accused now on leave

A Google spokesperson said Spagnuolu had been placed on leave.

“The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies,” the spokesperson said.

A Polymarket spokesperson said the company had cooperated with US authorities during the investigation.

“Polymarket worked closely with the US Attorney’s Office for the Southern District of New York and the CFTC [Commodities Futures Trading Commission] and is the only prediction platform to date whose cooperation has led to insider trading charges in the United States,” the spokesperson said.

“Blockchain trading is transparent, traceable and bad actors leave footprints.

“We are committed to maintaining accurate, fair and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”

Last week, the US House Committee on Oversight and Government Reform opened an investigation into insider trading on Polymarket and rival prediction market platform Kalshi.

The committee has requested documents detailing how these companies verify the identities of domestic and foreign account holders, enforce geographic restrictions and monitor suspicious trading activity to prevent insider trading.

The move follows a recent New York Times investigation reported that found more than 80 Polymarket users placed “suspiciously timed” bets hours before the US and Israel launched military strikes against Iran.

Prediction-based markets such as Polymarket are currently banned in Australia.

However,a recent report by The Guardian revealed prediction websites are taking tens of thousands of dollars in bets on Australian-specific issues, such as what words Prime Minister Anthony Albanese will say in Parliament.

According to the report, Polymarket accepted predictions worth nearly $700,000 on the recent Farrer by-election.