If you think decentralized crypto-based prediction platforms are a safe haven for clever players looking for profit, it’s time to change your approach.
AI algorithms, murder, and zero‑probability bets
The U.S. Department of Justice has just shown that traditional stock‑exchange rules, such as the ban on using confidential information, are forcefully entering the Web3 world.
Read also: Suspicious oil market transactions. Insider traders made billions. “A chilling example of market manipulation.”
The center of the massive scandal was a 36‑year‑old Italian citizen, Michele Spagnuolo, a senior information security engineer working at Google’s Swiss branch.
For over a decade he protected the giant’s infrastructure, only to later use it to manipulate bets on the Polymarket platform. Operating under the pseudonym “AlphaRaccoon,” the engineer enriched himself by over 1,2 million USD.
The mechanism of this insider trading was embarrassingly simple, though it required access to analytics systems labeled “Google Confidential.”
Every year the Mountain View giant publishes a December list of the most popular search terms (Google Year in Search).
For the community focused on technology and stock speculation, these lists became an ideal field for financial bets. Spagnuolo knew exactly what advanced AI algorithms would generate when analyzing trends long before the official report release on December 4.
In October he bet that the top of the list would be rapper Kendrick Lamar, basing his assumption on Google’s internal database.
However, his real masterpiece, which also drew significant interest from investigators, was the bet on November 27, 2025. It concerned a niche indie‑pop musician hiding behind the pseudonym D4vd.
The situation around the artist was tragic, as he was arrested and charged with brutal murder of a teenage girl. A storm erupted online, and interest exploded.
Nevertheless, external analysts and automated market makers (AMM) on Polymarket assigned the topic a “nearly zero probability” of becoming the most searched person of the year.
Spagnuolo, seeing hard data on his monitors in the Zurich office, staked huge sums on such an unrealistic scenario. When official statistics on December 4 confirmed his beliefs, the “AlphaRaccoon” account raked in a lion’s share of 1,2 million USD profit.
See also: Google’s big failure. The upcoming lawsuit could hit Alphabet shares?
The end of crypto anonymity and a hard landing for the scoundrel
How did a Google engineer with twelve years of cybersecurity experience get caught so easily?
The answer is classic hubris and KYC procedures. Although Spagnuolo funded his Polymarket bets using cryptocurrencies from several different wallets, the FBI was able to connect the dots.
A breakthrough was one of the related accounts on an external, centralized cryptocurrency exchange. There the engineer went through a standard identity verification procedure, presenting his Italian ID.
Spagnuolo was arrested in New York and faced charges of goods fraud, telegraph fraud, and money laundering. Interestingly, he was released on bail of 2,25 million USD.
The prosecutor expressed satisfaction, emphasizing that Americans demand ruthless prosecution of corporate greed that destroys the integrity of modern financial instruments.
Google’s spokesperson announced the immediate suspension of the employee and full cooperation with authorities, calling the incident a blatant violation of company policy.
Most intriguingly, the stance of the Polymarket platform itself, which was associated more with libertarian freedom, actively helped the FBI in the investigation.
Alphabet shares, the owner of Google, are falling in pre‑market trading to 387,24 USD
Chart. Alphabet stock price
Source: TradingView.
See also: The 2026 market is gearing up for a surprise? “Investors should ensure their portfolios are ready for a bullish trend.”
Source: Reuters.
