Overview
- Federal prosecutors in the Southern District of New York unsealed a complaint Wednesday charging Michele Spagnuolo with commodities fraud, wire fraud and money laundering for allegedly profiting about $1.2 million on Polymarket.
- Prosecutors allege Spagnuolo used a Google internal tool to view confidential Year in Search data before it was public and then placed bets on Polymarket under the account name AlphaRaccoon.
- After his wins, investigators say AlphaRaccoon moved millions of USDC through wallets, a swapping service, a privacy tool and an Italian payment processor account to try to hide the proceeds, which led to the money‑laundering count.
- Polymarket and Google say they are cooperating with authorities, Polymarket says on‑chain transparency helped flag the activity, and the CFTC has opened broader probes into prediction‑market trading.
- The case follows an April arrest tied to Polymarket and could shape whether regulators treat prediction contracts like other commodities, prompting tougher platform controls, company policies and possible new oversight rules.