Google engineer arrested for alleged Polymarket insider trading claims he was gambling

Michele Spagnuolo, a Swiss‑based engineer, was taken into custody by U.S. authorities on Thursday on allegations of insider trading involving the cryptocurrency betting platform Polymarket. The arrest came after a review of the trader’s activity on the platform, which allows users to wager on the outcomes of real‑world events. Spagnuolo’s case was cited by prosecutors as an example of the broader crackdown on illicit market speculation.

According to the U.S. Commodity Futures Trading Commission, Spagnuolo allegedly used non‑public information to place bets that were later deemed to constitute a violation of federal commodities law. However, Spagnuolo’s legal team argues that his actions were purely speculative gambling, a category that the commission contends is outside the scope of its regulatory authority. The defense has requested that the charges be dismissed on the basis that the alleged activity does not meet the statutory definition of insider trading under U.S. law.

The case highlights the growing tension between U.S. regulators and the global cryptocurrency ecosystem, where jurisdictional boundaries are often unclear. While the U.S. government continues to pursue enforcement actions against individuals it believes have engaged in unlawful market manipulation, Spagnuolo’s defense team maintains that the trader’s conduct falls within the legal limits of gambling. The outcome of the proceedings will likely influence how U.S. commodities law is applied to decentralized betting platforms in the future.