Google Engineer Charged Over Alleged Polymarket Insider Trading Seeks to Dismiss Case

Michele Spagnuolo, a Google engineer arrested in May by US authorities over alleged insider trading on the prediction market platform Polymarket, has filed a motion through his legal team to dismiss the charges against him. Spagnuolo, currently on leave from Google, faces charges of commodities fraud, wire fraud, and money laundering.

According to the criminal complaint, using the alias "AlphaRaccoon," he placed a series of wagers that generated over $1.2 million in profit. One notable bet correctly predicted that singer D4vd, who gained attention over a suspected connection to a killing, would be Google's most-searched person of 2025. D4vd was later charged with murder and pleaded not guilty.

Spagnuolo's lawyers do not deny he profited using internal Google information, but argue the wagers do not qualify as financial instruments regulated under the US Commodities Exchange Act, and should instead be treated as ordinary gambling, which falls under state rather than federal jurisdiction. They warn that classifying such bets as swaps would lead to absurd outcomes, potentially turning any wager worldwide — from a charity raffle to a local ping-pong match — into a regulated financial instrument.

This argument mirrors positions taken by state attorneys general currently battling both the federal government and prediction markets over whether event contracts should be classified as swaps or as gambling. A financial regulation expert suggested the dispute could eventually reach the Supreme Court.

Spagnuolo's defense additionally argues the US lacks jurisdiction over him altogether, since he is not a US citizen and was living in Zurich, Switzerland, when he made the trades on a platform technically administered by a Panama-based entity, even though Polymarket itself is headquartered in New York.

Spagnuolo is the second person publicly charged over alleged insider trading on Polymarket. A month before his arrest, Special Forces soldier Gannon Ken van Dyke was charged in a separate case involving wagers tied to the raid on former Venezuelan leader Nicolás Maduro, and his defense is making similar arguments for dismissal.