Federal prosecutors have charged a Google engineer, identified as Spagnuolo, with fraud and money laundering after he allegedly exploited access to internal search data to place winning bets on Polymarket, the decentralized prediction market platform. The Commodity Futures Trading Commission also filed a parallel civil complaint alleging insider trading violations. Spagnuolo reportedly used proprietary Google search trend data — not available to the public — to gain an unfair edge on prediction market outcomes, netting approximately $1.2 million in profits. The case marks a significant moment for crypto-based prediction markets, raising questions about how regulators will treat information asymmetry and insider activity on decentralized platforms. It signals that U.S. authorities are increasingly willing to apply traditional securities and commodities laws to blockchain-based trading venues.
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