U.S. federal prosecutors have charged a Google employee with using non-public company data to trade on the Polymarket prediction market. The CFTC has also filed a civil lawsuit seeking fines, forfeiture of profits, and a ban on trading and registration.

The case points to insider data transactions.

Prosecutors allege that the defendant had access to internal Google tools that allowed him to view confidential data related to "Year in Search." The indictment also states that these materials bore the "Google Confidential" label.

A Google spokesperson told the media that using confidential information to place bets is a serious violation of company policy. The employee has been suspended, and the company is evaluating further actions.

The CFTC also filed a civil lawsuit.

The CFTC alleges that the conduct violates the Commodity Exchange Act and is seeking damages, recovery of illicit gains, civil penalties, and trading and registration bans.

This is the second federal criminal case in the United States related to insider trading in prediction markets. Previously, Polymarket and Kalshi had both tightened their related rules.

Industry compliance pressures are rising

Polymarket told the media that on-chain transactions are traceable, and violators will leave a trail. Industry insiders believe that this case demonstrates that insider trading in prediction markets can also be identified and prosecuted.

States such as New York, California, and Illinois have also pushed for restrictions on public officials using non-public information to participate in prediction market trading. Trump had previously publicly supported the CFTC regulating prediction markets.