Overview
- Federal prosecutors in the Southern District of New York unsealed a criminal complaint on May 27, 2026 that led to the arrest of Michele Spagnuolo and his release on a $2.25 million bond.
- Spagnuolo faces three criminal counts—commodities fraud, wire fraud, and money laundering—and the Commodity Futures Trading Commission filed a parallel civil complaint seeking disgorgement, penalties, trading bans, and a permanent injunction.
- Prosecutors say he used an internal Google tool to view nonpublic Year in Search data, traded on Polymarket under the handle “AlphaRaccoon” to place highly accurate bets including one backing D4vd, and then moved proceeds using USDC transfers, crypto swaps, privacy services, and an Italian payment account.
- Polymarket and its community had flagged the AlphaRaccoon wallet for suspicious accuracy and referred the activity to authorities, and Google placed Spagnuolo on leave while it cooperates with investigators and reviews the breach of company policy.
- The case follows an earlier 2026 Polymarket prosecution and could set precedents for treating prediction-market contracts as within existing commodities and fraud laws, raising pressure for stronger platform surveillance, registration requirements, and tighter corporate controls over sensitive data.