Luca Netz: Unveiling Shadows Behind NFT Success

By  Noah Washington October 10, 2023

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  • Luca Netz's involvement in questionable projects like Supreme Patty's "Free Chain Scam," drop shipping courses and day trading raises ethical concerns
  • Netz received large, unexplained payments from projects like Spooky Boys Country Club (SBCC) and Cookies N' Kicks (CNK) which later failed to deliver
  • The NFT market as a whole suffered greatly during the 2022 crypto bear market, with trading volume and unique holders plummeting over 90% from peak levels

In the fast-paced world of NFTs, where fortunes can be made overnight, there are those who ride the wave of success and those who manipulate it for personal gain. One name that has recently risen to prominence in the NFT space is Luca Schnetzler, better known as Luca Netz, the CEO of Pudgy Penguins.

With over 4,500 holders and secondary volume exceeding 190,000 ETH, Pudgy Penguins is undoubtedly one of the most popular NFT projects in today's market. However, beneath the surface of this success story lies a complex web of controversies and questionable practices that deserve our scrutiny.

From Obscurity to NFT Royalty

Luca Netz's journey to becoming the CEO of Pudgy Penguins started with an audacious move. After revelations about the founder of Pudgy Penguins, ColeThereum, being involved in drop shipping scams and other questionable activities, Luca Netz made a bid of 750 ETH in April 2022, worth approximately $2.5 million at the time, to acquire the project.

This move catapulted Netz into the NFT limelight, but few were aware of the secrets he harbored.In 2018, a controversial promotional campaign by influencer Supreme Patty, known as the "Free Chain Scam," set the stage for Luca Netz's journey into the world of dubious marketing practices.

Customers were promised high-quality chains valued at $100 for "free," were hit with unexpected high shipping fees and subpar products. The backlash was swift and widespread, reaching as far as the Better Business Bureau and media outlets.

What many didn't know at the time was the connection between Luca Netz and this scam through LA GOLD CARTEL LLC, a company that ran a similar drop shipping site named Supreme Patty himself acknowledged that someone named "Luca" had convinced him to partner up in this venture. While Netz often portrays himself as a self-made millionaire through "influencer marketing," his involvement in this scam raises serious questions.

Drop Shipping Courses & Day Trading

In the aftermath of the Free Chain Scam controversy, Luca Netz shifted gears and began selling drop shipping courses via e-commerce, with prices ranging from $425 to $1,700. What's particularly concerning is his no-refund policy, leaving many customers feeling cheated.

The bitcoin bull run from 2020-2022. Source: CoinGecko

Simultaneously, during the cryptocurrency bull market starting in 2020, Netz ventured into day trading, creating the Netz Trades Discord and selling access for $100 a month. Despite promoting it as "run by real traders making real money," the lack of verifiable profit-and-loss statements and exit signals raised suspicions about the legitimacy of this venture.

What's more, Netz's partner in these endeavors, Nick Von Geijer, known as Nick Von, has faced accusations of various NFT scams and even romance scams. The association between Netz and Von raises questions about the ethical standards of those involved.

The Million-Dollar Mystery

Luca Netz's foray into NFTs also led him to the world of Queue Spooky Boys Country Club (SBCC), a 2021 project that raised 779 ETH during its mint. Netz's involvement as a board member raised eyebrows. What raised even more questions were the substantial payments he received from SBCC, totaling over $2.2 million. The timeline of these payments, months before the founder allegedly "rug-pulled," suggests that Netz had a significant role in the project, despite his public denial.

Next was Netz involvement with CNK which used the same developers as SBCC. Initially a sneaker store, CNK promised investors a lifetime membership with various perks. However, accusations of rug pulling and unfulfilled promises led to backlash. Although Netz distanced himself from CNK, blockchain evidence suggests that he received payments directly from CNK's NFT collection.

Netz's takeover of Pudgy Penguins from ColeThereum highlighted a pattern of questionable practices and ethical concerns within the NFT space, leaving behind harm and complaints that are crucial to recognize. Comparisons between Netz and ColeThereum reveal a history of deception across multiple projects tied to these key figures in the NFT community.

The Ethereum NFT Collapse

These questionable practices and lack of accountability in the NFT space likely contributed to the larger crypto bear market in 2022. According to analysts, the Ethereum NFT market suffered a catastrophic decline over the past year.

In July 2023, Ethereum NFT trading volume hit its lowest point since the FTX collapse in November 2022 - plummeting 90% from its peak of $5.1 billion in January 2022 to just $568.5 million.

OpenSea NFT trading volumes in ETH, 2018-2023. Source: Ambcrypto

The number of unique active NFT holders also reached a multi-year low of 107,000 in July 2022, a 66% drop over 12 months. Meanwhile, top marketplace OpenSea saw its monthly transacting users fall below 65,000.

The Ethical Dilemma

Despite the overall collapse, new NFT marketplace Blur (BLUR) has emerged as a rising star - overtaking OpenSea in trading volume and sales in 2023. This is remarkable given Blur has just one-third of OpenSea's user base, showcasing its meteoric growth amidst the recession.

However, Luca Netz's rise to fame from dubious practices like alleged rug pulls and deceptive marketing to NFT fame signals a lack of accountability in the web3 space. Netz's story highlights the need for investors and creators in this landscape to stay vigilant. As the NFT space rapidly evolves, prioritizing transparency, integrity and ethics is crucial.

The cautionary tale of Luca Netz serves as an important reminder - in a field rife with possibilities, the actions of influential figures must still be scrutinized. It falls on all participants to uphold ethical standards, or risk jeopardizing trust in the entire NFT ecosystem.