Note: On October 7, 2023, Twitter user NFTshepard posted at 4:27 AM that the current CEO of the well-known NFT project Pudgy Penguins Luca Netz’s previous acquisition of Pudgy Penguins was funded by multiple NFT projects. It was published in The article on substack investigated the multiple escape scams Luca Netz participated in before acquiring Fat Penguin.
But five hours later, Horlomite Research accused NFTshepard of stealing the survey results that Horlomite Research spent four months on. Horlomite Research also said that a larger encryption project with a market value of billions of dollars will be exposed in the next few weeks.
Jinse Finance 0xxz translated NFTshepard’s article for readers’ reference:
Luca Schnetzler, known as Luca Netz online, is the current CEO of Pudgy Penguins. With over 4,500 holders and a secondary trading volume of over 190,000 ETH, Pudgy Penguins is one of the most popular NFT projects on the market today.
After Pudgy Penguins founder ColeThereum was revealed to be involved in airdrop operations and other unethical activities, Netz took over the project for 750 ETH and became CEO.
But few people know that Netz himself also has some unknown secrets.
What follows are the findings of an extensive investigation into Netz’s history, which is littered with dropshipping, questionable marketing practices, alleged NFT scams, and the controversial “free necklace scam,” all with receipts and blockchain data support.
Discover the dark details he doesn't want you to know.
Supreme Patty Free Necklace Scam
In 2018, a promotional event by internet celebrity Supreme Patty caused controversy. He offered high-quality "free" necklaces worth $100 on the site, but at checkout, customers found themselves being charged unexpectedly high shipping costs, ranging from $18 to $20 per item.
Additionally, delivery times are weeks, sometimes even months, if anyone receives them at all. Those customers who received their orders discovered that their necklaces were actually cheap $1 AliExpress items shipped directly from China. Not worth the $100 they are advertised to be.
Outrage over this has flooded the Internet. Dozens of complaints reached the Better Business Bureau, an organization that protects consumers from unfair and misleading advertising and sales practices. TheDailyBeast wrote an article titled “ Instagram influencers fool their fans with ‘free’ products .” Even Supreme Patty's Urban Dictionary entry still mentions it today: "He manipulated his young audience for financial gain, even tricking them into passing 'free jewelry' (a dropshipping scam)".
Lewis Spears, a YouTuber with over 500,000 subscribers, created an in-depth video called "Supreme Patty's Free Necklace Scam." In the video, Spears explains how the free necklace scam works, calling it "one of the most despicable ways to make money he's ever seen online." Another well-known YouTuber, NameBran, said, "Do I think I'm being scammed? Absolutely." He called the items "absolute garbage" in a 2018 video. Others have created videos warning fans not to buy.
The backlash was so great that it became known as the free chain scam.
The man behind the scam
But who is the person behind this whole scam? Payments are processed through a company called LA GOLD CARTEL LLC. The company operates a similar placement site called lagoldcartel.com. Its brand ambassadors are Supreme Patty and Xavier Wulf.
Source: lagoldcartel.com
In a new interview in 2023, Supreme Patty said that someone named "Luca" persuaded him to cooperate, sending a series of emails: "It had a completely different name at the time and we ran a test operation for a few days, Everything seemed to be going well. So we ended up transitioning to my brand new website.”
Netz often reminds his viewers that he became a self-made millionaire through "influencer marketing," but avoids being accused of free necklace scams and the complaints and backlash that stem from these deceptive marketing tactics.
However, business records confirm that Luca Schnetzler (Luca Netz) is the owner and founder of LA GOLD CARTEL LLC . Netz was confirmed to be the person behind the scam.
With this information, it appears that Netz deceptively marketed "free necklaces" to impressionable Supreme Patty fans who felt fooled after discovering they could have purchased the same item for $1 on AliExpress. Accumulated wealth.
Dropshipping Courses and Day Trading
After the free necklace controversy, Netz began selling his dropshipping method through e-commerce courses. Prices range from $425 to $1,700. These courses are notable for their no-refund policy.
Source: netzcommerce.com
Meanwhile, Netz appears to have become an authority on day trading during the 2020 crypto bull run. In Q4 2020, he created the Netz Trades Discord, netztrades.com, and netztrades socials and began selling access for $100 per month.
His websites look almost identical, using similar templates, names, and slogans. It is promoted as "Real Profits by Real Traders". But there seems to be a lack of verifiable profit and loss statements, exit signals and refund policies.
Luca Netz and Nick Von
His partner in these endeavors is Nick Von Geijer, better known online as Nick Von. Von is the guy who will scream at the camera for you to join his Discord and show off a half a million dollar vehicle. As a result, he has been accused of various NFT scams.
What's more serious is that Von faces multiple charges of deceiving women through pig killing trays. One woman shared her horrific experience on a website called LAscammer. Another woman has launched a GoFundMe campaign called "Sue Nick Von Geijer."
The connection between Netz and Von raised some questions, as Netz publicly praised Von as one of his closest confidantes. In fact, in an episode of his podcast Free Game w/ Netz, Netz credited Von with giving him a "spiritual awakening."
Maybe Netz had a lengthy lapse in judgment? Who knows? Again, no one is guilty of having a relationship with someone else. But given that Von remains the moderator of his Netz Trades Discord, which is still active today under the name Internet Accelerator, one might wonder whether Netz and Von are still partners .
Project 1: Spooky Boys Country Club
After making the trade, Netz entered the world of NFTs. Come to Spooky Boys Country Club (SBCC). This is an NFT project from 2021 that raised 779 ETH during the minting process.
Its founder, HolyGhostnft, seemed to disappear shortly after launch. It makes investors feel like they are entering a scam. In April 2022, RugPullFinder marked it as "confirmed escape".
To revive the project, SBCC investors formed a "revival team." Netz, a distinguished community member, was appointed to the Board of Directors in August 2022.
What few people know is that before his appointment, Netz received millions of dollars in payments from the SBCC long before the founders disappeared . Let’s dig a little deeper…
SBCC Mint Fund distribution, via its smart contract and payment wallet (0x843a97185de92a8fd214efa8e14bf67e97892342)
Blockchain data shows that lucanetz.eth received $702,000 on November 13, 2021, then another $51,500 on November 30, and another $454,000 on December 20, 2021. Netz received over $1.2 million (277 ETH) directly from SBCC.
We also saw netztrades.eth, a wallet closely associated with Netz and named after his day trading Discord, also receive $1 million from the SBCC during the same period.
When combined, payments received by lucanetz.eth and netztrades.eth in the months before their founders allegedly ran away totaled more than $2.2 million (516 ETH). In fact, among the top 10 wallets for lucanetz.eth and netztrades.eth, lucanetz.eth received the largest payments, followed by netztrades.eth:
SBCC payment distribution, source: Misttrack.io
To summarize concisely, the developer of SBCC, cowboylabs.eth, received a total payment of 173 ETH. That's a pretty big difference, despite the crucial role they play. If Netz isn't an important part of the team, why does he receive the lion's share? Why is there more Netz than founders?
Coincidentally, the Spooky Boys Country Club trademark was filed in the same year by the same law firm that filed the Netz Trades, Netz Commerce, and Netz trademark applications. Some SBCC investors suspected that Netz was the founder, but he always denied it:
However, Discord logs confirmed that Netz was the second person to join the SBCC server. Join 14 days before the founder. This implies that Netz played a key role from the beginning and was not just a "revival team" member who joined later.
Project 2: Cookies N' Kicks
Cookies n' Kicks (CNK) is a sneaker store in Melrose named by Eli Hayman. Netz is one of the partners. During the NFT craze, CNK decided to launch NFT. They promise to offer a lifetime membership to CNK University, which includes online courses, workshops, podcasts, private Twitch events, 10% off on their store, and of course an online game on the Metaverse.
CNK raised $718,633 from its minting. Accusations of runaways have emerged over failed promises. As with the free necklace scam, investors disillusioned with CNK produced YouTube videos, posts and tweets exposing the project.
“You [CNK] are a scam, you stole my money, you ban anyone who expresses opinions on how you handle things in Discord” - @ObeyMr_1400, CNK investor
Some claim that the only reason CNK created nfts in the first place was because they couldn't pay shippers.
CNK Minting Distribution Source: Smart Contracts and Payment Wallets ( 0xccfa6db439026cef29cc48bfd1a365b8afe1606a )
Netz distanced himself from CNK after facing criticism, arguing that he was only involved in the Melrose store and not NFTs. However, blockchain records show that lucanetz.eth and netztrades.eth received proceeds directly from the NFT series the day after minting. $92,245, $15,374 and $4,835 were received on February 10 and March 26, 2022 respectively.
CNK blockchain records exported from Etherscan.io
CNK is developed by cowboylabs.eth. Like the two projects SBCC and CNK, this is its second NFT project involved. So, you may be wondering, who is Cowboy Labs?
Project 3: DemiGodsUniverse
Cowboylabs.eth is the team behind DemiGodsNFT, also known as DemiGodsUniverse (DG).
DG promises holders a share of 30% of the sales of its upcoming comic book. They raised $1,117,716 through minting. Of this total, Cowboy Labs received $134,372. But the comic book was never published. Their website and Discord were offline, and social media was disabled. Another NFT that got away...
DG investors called it quits on social media
How could a seemingly unknown project raise over a million dollars? Let’s look at their marketing tactics.
Fake Gary Vee Promotions
DG uses Gary Vee's image to suggest that he is interested in or involved in their projects. Dozens of accounts posted misleading Gary Vee content. No Jumper and Millionaire Mentor even posted posts like “Is Gary Vee tweeting about Demi Gods NFTs?” Millionaire Mentor received $22,395 for these advertising fees. Coincidentally, he was also paid $35,082 for promoting SBCC.
Fake celebrity endorsements often used in scams
The internet celebrity who actually promoted DG turned out to be Netz’s former LA GOLD CARTEL brand ambassador Xavier Wulf. Wulf promoted his custom DG the day before their casting. Then delete it after some time.
Replies to a deleted message on Netz Trades Discord revealed that DG was also promoted on Netz's servers.
Fake BAYC gifts
In December 2021, DG held a Bored Ape Yacht Club giveaway event. Anyone has a chance to win Bored Ape #8085 . So who owns this Bored Ape during the giveaway?
Source: instagram.com
Luca Netz owns Bored Ape #8085 . He purchased it for 55 ETH on August 11, 2022, and has held it ever since. On January 2, 2022, he sent it to 0xda9614. So maybe that's the lucky winner? Questionable:
The first transaction of 0xda9614 was $10,677 from lucanetz.eth
The second transaction is to forward the money to netztrades.eth
In fact, the entire wallet history shows that 0xda9614 only received ETH from lucanetz.eth and netztrades.eth. What happened next?
Source: opensea.io
After Bored Ape was received at 0xda9614, it was forwarded to a wallet named Ckkelly. The wallet was sold on January 14, 2022, earning 76.95 ETH. After the sale, Ckkelly sent 21.97 ETH to DG’s marketing wallet.
The sale earned 76.95 minus 21.97, leaving Ckkelly with 55 ETH. Remember, Netz purchased Bored Ape for 55 ETH. Coincidence? Let’s dive into Ckkelly’s wallet:
Ckkelly’s first NFT minted by lucanetz.eth
Ckkelly sends it to netztrades.eth which sells it at a profit
Ckkelly received yOOt#5147 airdropped by 0x746aCD, which was forwarded to lucanetz.eth
Ckkelly is funded by 0x746aCD, the wallet that also funds DG multisig
CCkkelly and 0xda9614’s wallets have never held DG’s NFTs, which is a requirement to win the BAYC giveaway. I can't find an official announcement of the Bored Ape winner. So, do you think this BAYC giveaway looks legitimate?
To summarize: DG used Netz's Bored Ape, promoted by Netz's former brand ambassador, signaled through the Netz Trades Discord, and the same developers as SBCC and CNK, two projects that Netz is also deeply involved in, for these three projects All were publicly accused of fraud. This brings us back to the original question: who is Cowboy Labs?
Cowboy Labs
Developers at Cowboy Labs, including 0xLoMel and CowboyUly, made over $950,000 from these so-called runaway projects. But you probably know them as Lorenzo Melendez, now the president of Pudgy Penguins, and Ulysses Atkeson, the chief blockchain officer of Pudgy Penguins.
Source: pudgypenguins.com
Netz introduced them to the Pudgy Penguins after taking over from Cole Thereum. This is the fourth project that Netz and Cowboy Labs have participated in.
DG's original website listed LoMel as their developer, but it was later changed to another name. CNK's website only has a developer named "Cowboy", and an older version of the Cowboy Labs website mentioned SBCC, but that too was removed. None of Cowboy Labs, Melendez, or Atkeson's LinkedIn mentions these so-called runaway projects.
But their cowboylabs.eth wallet, payments, and deployment tie it all together:
Cowboy Labs payment source: Misttrack.io
Ironically, Pudgy Penguin founder Cole Thereum, who has been accused of dropshipping, NFT cash-out and other unethical behavior, was replaced by someone with a seemingly more questionable past history.
Netz's past shows a series of misleading marketing tactics from Web 2 to Web 3, culminating in three separate NFT schemes that caused investors to suffer substantial losses - a pattern that has sparked concerns about its Ethical concerns about financial success.
While some may argue that Netz accomplished more than ColeThereum, it's important to understand how Netz amassed his vast fortune through these questionable means, and the hurt and complaints he left behind.
