On Wednesday the lawyers of Michele Spagnuolo have filed a motion to dismiss the charges against him. The engineer of Googlearrested in May by US authorities for alleged insider trading on Polymarketdoes not openly deny having made money using internal company information. The defense instead attacks the legal qualification of those bets: not financial instruments subject to federal law on commodity exchanges, but international bets over which the United States has no authority.
The formal charges are commodity fraud, wire fraud and money launderingand Google has meanwhile placed him on leave. Behind the alias AlphaRaccoon would have placed a series of closed bets on Polymarket’s flagship platform with profits exceeding 1.2 million dollars. Among these, according to the criminal complaint, the correct prediction that the singer D4vd he would have been the most searched person on Google in 2025: the musician had come into the spotlight for his suspected link to a brutal murder, and was later indicted for murder, pleading not guilty.
Extending the notion of swap up to and including an episode on who will be the most searched person on Google, the lawyers write, “would go against the purpose and history of the law” and would lead to “absurd results”. With that criterion, any bet in the world would become a financial instrument, from a charity lottery to a neighborhood ping-pong match.
Spagnuolo is not a US citizen and lived in Zurich when he would place Google-related bets. The platform on which it operated is banned in the United States and appears to be administered by Adventure One QSSan entity with a declared base in Panama, while the Polymarket company is based in New York. On this basis, the defense claims that the US government had no jurisdiction over the case from the beginning.
Finally, the motion claims that the internal information exploited by Spagnuolo had no commercial value for Google, and that for this reason the charges should be dismissed. “The extraterritorial argument is interesting and raises the question of whether the United States should be the world policeman of predictive markets”, comments Phillips, who looks beyond the individual defendant: “It is the question that will most likely come to a head Supreme Court“.
