As much as I enjoy a gacha pull as a little treat, I’m not overly jazzed about how inescapable gambling mechanics have become in games—or anywhere else, for that matter. So-called prediction markets are also becoming increasingly popular, and one Google engineer has been arrested for allegedly leveraging insider information to place bets on Polymarket, a cryptocurrency-based platform.
Michele Spagnuolo was charged this week on the grounds that he’d used confidential business information to place a number of bets on Polymarket (via Wired). Up until his arrest, Spagnuolo had worked for Google since 2014, most recently as a security engineer at Google Zürich. His Google research page has since been taken down.
FBI agent Brandon Racz wrote in the legal complaint, “Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data.”
For those unfamiliar, prediction markets encompass more than sports betting, allowing users to wager on the outcome of a variety of future events—such as whether GTA 6 will get delayed again. More Perfect Union’s recent reporting on Polymarket makes for illuminating viewing (and, in my humble opinion, offers plenty of reasons to never go all-in on prediction markets).
Spagnuolo, going by the Polymarket handle ‘AlphaRaccoon,’ allegedly bet on who Google’s most-searched person of the year would be. He netted $1.2 million in total, after correctly predicting that the winner would be D4vd, the musician charged with first-degree murder in April this year.
(Image credit: Tayfun Coskun/Anadolu Agency via Getty Images)
How Spagnuolo allegedly sought and leveraged the insider information is somewhat vague at this point in the case. A press release about the case from the Southern District court of New York attempts to explain, “In connection with his role, Spagnuolo had access to Google’s internal data systems, including an internal software tool that provided him with access to confidential, nonpublic data. That software tool bore a banner that stated, in part, ‘Google Confidential’ in red text. Indeed, Spagnuolo certified his understanding of various Google confidentiality and ethics policies.”
Spagnuolo has been charged on multiple counts, including commodities fraud, wire fraud, and money laundering. These charges present a potential maximum prison sentence of between 10 and 20 years.
It’s important to stress that Michele Spagnuolo has only been charged at this point (and charges do not indicate someone is guilty inherently). Though Spagnuolo was arrested in New York, it’s also worth noting he is an Italian citizen working for Google Zürich, which could complicate any future trial that may take place.
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” US Attorney Jay Clayton said, “As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”
