Technology
Google engineer accused of Polymarket insider trading seeks dismissal, arguing trades were gambling
Michele Spagnuolo's defense claims federal authorities lack jurisdiction over wagers made from Switzerland on an offshore platform.
The short version
- Michele Spagnuolo, a Google engineer arrested for alleged insider trading on Polymarket, filed a motion to dismiss charges of commodities fraud, wire fraud, and money laundering.
- His defense argues his wagers were international gambling rather than financial swaps governed by the Commodities Exchange Act, and that U.S. authorities lack jurisdiction over a non-U.S. citizen operating abroad.
- The case reflects broader legal battles between U.S. regulators and states over whether prediction market event contracts constitute regulated financial instruments or state-level gambling.
- The court must now decide whether to dismiss the federal charges or allow the prosecution to proceed.
Key facts
- Michele Spagnuolo, a Google engineer placed on leave, filed a motion to dismiss federal charges of commodities fraud, wire fraud, and money laundering.[Wired]
- Prosecutors allege Spagnuolo used the pseudonym "AlphaRaccoon" on Polymarket to generate over $1.2 million in profits using internal Google data.[Wired]
- Spagnuolo's legal team contends that U.S. authorities lack jurisdiction because he is not a U.S. citizen, resided in Zurich, and placed wagers on an offshore platform.[Wired]
- The defense asserts that prediction market event contracts should be classified as gambling rather than financial swaps subject to the Commodities Exchange Act.[Wired]
- Spagnuolo is the second individual publicly charged in the U.S. with alleged insider trading on Polymarket, following Special Forces soldier Gannon Ken van Dyke.[Wired]
What remains uncertain
- Whether U.S. courts will accept the defense's classification of prediction market wagers as state-regulated gambling rather than federally regulated swaps.[Wired]
- Whether federal prosecutors can establish extraterritorial jurisdiction over non-U.S. citizens trading on offshore prediction market entities.[Wired]