Google engineer's insider-trading case sparks debate over prediction-market regulation

Michele Spagnuolo, a Google engineer arrested earlier this year, has asked a court to throw out federal charges of commodities fraud, wire fraud and money laundering tied to his activity on the Polymarket platform. Prosecutors say he, under the pseudonym “AlphaRaccoon,” made a series of bets that netted over $1.2 million, including a correct prediction about a singer’s search popularity. Spagnuolo’s counsel argues the wagers are classic gambling, not financial instruments subject to the Commodity Exchange Act, and that U.S. authorities lack jurisdiction because he is a non-U.S. citizen who placed the bets from Zurich on a platform administered by a Panama-based entity.

The defense further asserts that the alleged insider information held no commercial value for Google. This dispute mirrors a nationwide battle between state attorneys general and regulators over the legal status of prediction markets, a conflict that could eventually reach the Supreme Court. The Commodity Futures Trading Commission has not commented, and Google declined to respond.