One of the things that 2026 will be known for is the widespread use of prediction market apps like Polymarket and Kalshi. With these apps, participants can make bets with other participants using the app on the final result of a binary question.
You can bet against other participants on the final result of a “Yes” or “No” question
Once the event takes place, the winning shares are worth $1.00 each and the losing shares are worthless. Keep in mind that you can trade your shares at any time and profit from any appreciation in your position.
Spagnuolo made $1.2 million in illegal profits
Many analysts believe that there are members of the current Administration who are using Polymarket and another prediction market, Kalshi, to make perfectly timed bets on the war in Iran and subsequent reaction in the oil markets.
Using an account named “AlphaRaccoon,” Spagnuolo had the advantage of knowing the outcome of the wagers because he had accessed Google’s confidential internal data. In the prediction market, like the traditional investment markets, the use of classified, confidential inside information to profit is against the law.
The Google engineer was placed on leave and released on a $2.2 million bond
We’re working with law enforcement on their investigation. The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies
Google spokesman
The complaint against Spagnuolo stated that he placed a $381.12 “yes” bet that singer-songwriter d4vd (David Anthony Burke) would rank in the most searched people of the year. He also made a $5 bet that d4vd would be the number one searched person on Google with an implied probability of “slightly higher than 0%.”
He made other bets such as a $613,000 “no” bet that Pope Leo would be the most searched person and bet $500,000 that Donald Trump would not be the most searched person on Google during 2025. From October 15 through December 4, 2025, the Google engineer wagered $2,754,092. When Google announced the most searched results, Spagnuolo made over $1.2 million in profits according to authorities.
Michele Spagnuolo allegedly abused his elevated access to confidential trends to place bets with nonpublic information and receive more than one million dollars in unlawful profits. The FBI remains dedicated to searching for fraudsters who betray their employer for personal financial gains.
James C. Barnacle, Jr., FBI Assistant Director in Charge
Spagnuolo faces one count of violating the Commodity Exchange Act, which carries a maximum sentence of 10 years in prison; one count of committing wire fraud, which carries a maximum sentence of 20 years in prison; and one count of money laundering with a maximum sentence of 20 years in prison.
Spagnuolo could end up in prison for 50 years
If convicted of all three and sentenced to the maximum for each count, Spagnuolo could spend up to 50 years in jail. It is important to catch those who use inside, non-public information to profit in the market, whether we are talking about the equity market, the commodities market, or the prediction market. That’s because the integrity of and trust in these markets must never be questioned.
Real-life example of Polymarket bets you can make.| Image by PhoneArena
There has to be very intense temptation to use prediction markets to profit from inside information. Last month, a U.S. special forces soldier was charged with insider trading by the U.S. attorney’s office for the Southern District of New York. Using inside information he had on the capture of Venezuelan president Nicolás Maduro, the soldier made $400,000 on Polymarket and pled “not guilty.”
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