Google Engineer Denies Insider Trading Allegations on Polymarket
Michele Spagnuolo claims his bets were gambling, not financial instruments.
1Google Engineer's Allegations
Michele Spagnuolo, a Google engineer, was arrested by US authorities in May for his bets on Polymarket. His legal team argues that these bets should be considered international gambling, not financial instruments, and thus outside US jurisdiction. They claim the US has no authority over such activities.
2$1.2 Million in Profits
Under the alias 'AlphaRaccoon,' Spagnuolo allegedly placed a series of bets on Polymarket's flagship platform, resulting in profits exceeding $1.2 million. One bet correctly predicted that singer D4vd, later charged with murder, would be Google's most-searched person in 2025.
3Legal Arguments
Spagnuolo's lawyers contend that classifying these bets as 'swaps' under the Commodities Exchange Act would contradict the statute's purpose. They also argue the US lacks jurisdiction, as Spagnuolo is a non-US citizen who placed bets on a non-US platform while living in Switzerland.
4Polymarket's Legal Status
Though headquartered in New York, Polymarket's flagship prediction market is banned in the US and technically operated by a Panama-based entity, Adventure One QSS. This creates jurisdictional ambiguities, complicating regulatory oversight.
5Similar Cases
Spagnuolo is the second person publicly charged with alleged insider trading on Polymarket in the US. A month earlier, Special Forces soldier Gannon Ken van Dyke was accused of making over $400,000 from bets linked to a raid on former Venezuelan leader Nicolás Maduro.
6CFTC's Stance
The CFTC has emphasized that Van Dyke's Polymarket contracts were 'swaps,' a position it may replicate in Spagnuolo's case. This highlights the broader regulatory battle over whether prediction markets should be treated as financial instruments or gambling.
7Potential Supreme Court Battle
Financial regulation expert Todd Phillips predicts this issue could reach the Supreme Court. Spagnuolo's defense aligns with states suing prediction markets, setting the stage for a landmark legal showdown.
8Industry Implications
This case could set a precedent for the legal status of prediction markets. Cases like Spagnuolo's and Van Dyke's may shape future regulations, determining whether these platforms operate as financial markets or gambling entities.
Original article: Wired — Google Çalışanı Polymarket İçeriden Bilgi Ticareti Suçlamalarına Karşı