The king of Web3 scams is leading Pudgy Penguin to its demise.

Web3 scam king leads Pudgy Penguin to downfall.

Article Author: Horlomite Research Translation: Block unicorn

@Luca Netz acquired Pudgy Penguins for 750ETH (worth $2.5 million) at the time, almost through a series of sell-offs and manipulations, in which he and his partners were involved.

At the end of this article, you will see on-chain evidence showing that 99.06% of Luca’s contribution came from shares he obtained from six different sell-off operations. These projects raised millions of dollars, promising various benefits such as animation series, comic books, BAYC lotteries, etc. However, none of these benefits were realized, and the only benefit was that millions of dollars flowed into Luca Netz’s wallets. You will see that these people are a group of serial fraudsters involved in fraudulent activities in various industries.

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Luca’s Early Years Before entering the NFT space, Luca Netz, CEO of Pudgy Penguins, had a series of remarkable, public, and often exaggerated enterprises and plans. The name he gave himself, “Burberry Robber,” is very fitting. We will detail how he created multiple NFT scams before joining Pudgy Penguins, his malicious marketing strategies, his paid trading groups, his claim to “teach you how to make money,” his promotion of dozens of tokens in the industry and the tokens he dumped. He has been arrested multiple times, turned his friends into fake experts and used them to sell courses, committed multiple securities fraud and telecommunications fraud, and so on. You will learn that Luca has done every trick in the fraudster’s handbook.

To better understand him, we will start by exploring his early criminal career. Some of Luca’s initial criminal activities included stealing from local stores and then dropping out of school at the age of 16, admitting to becoming a drug dealer. Some of his other early adventures included deceiving property owners into renting him large warehouses where he would hold illegal parties without their knowledge. Despite being arrested multiple times, he avoided imprisonment because he was still a minor at the time and the contracts he signed were not legally binding. Therefore, the responsibility for his actions fell on the property owners. Quoting Luca, “Believe me, on these streets, on the streets of Los Angeles, being a young adventurer… I can’t even talk about the stuff I’ve done now.” Here is the video:

https://rumble.com/v2n93da-2-luca-netz-about-hosting-illegal-LianGuairties-clip.htmlhttps://rumble.com/v2n9bms-3-luca-netz-cant-even-talk-about-the-stuff-ive-done-now-clip.html

In 2017, he started his first company called “LA Gold Cartel, LLC”, and he still serves as the CEO to this day:

https://opencorporates.com/companies/us_ca/201723610245

He used the newly established company to sell fake jewelry, counterfeit Airpods, and other devices, and used influencers like ‘SupremeLianGuaitty’ to promote their counterfeit goods. The company used promotional images of genuine Apple products while selling counterfeit goods. These items were advertised as free, but during check-out, an exorbitant shipping fee, higher than industry standards, was added to make a profit and deceive customers.

If a seller intentionally declares an item as free while inflating the shipping fee to cover the actual price of the item, this would be considered deceptive or fraudulent business practices under California law. Not to mention the fraud involved in selling counterfeit goods and using images of their genuine products on the website.

Web Archive Link:

https://web.archive.org/web/20200602065940/https://www.supremeLianGuaitty.com/

Here is a quote from Luca: “I started my first consumer-oriented business selling fake gold chains and cubic zirconia diamonds, selling these counterfeit goods to people who want to wear jewelry like rap singers.” Below is the video link:

https://twitter.com/supremeLianGuaitty/status/1006009187548057605?s=20

Like other professional scammers, Luca started buying fake reports related to himself to create a false impression of credibility. We found 10 articles written between April and May 2021, all of which used previously unseen photos of Luca. This includes Sun Nigeria, which we believe even fabricated the date of the article as 2016 while using photos taken in 2021. Such media outlets are often exploited by fraudsters and scam experts to publish false and fraudulent articles. Below is a list of news articles for sale, provided as a service by another scammer named Riachu, and almost all of Luca’s articles are included, with prices ranging from $200 to $1200.

In addition, you can also see an old fake news report featuring Luca and his good friend and long-term partner Nick Von. We will later provide detailed information on how Nick has defrauded dozens of people out of millions of dollars over the past few years. To illustrate the maliciousness of some of the individuals involved, you will see that Nick Von’s victims include his girlfriend and his grandmother, whom he defrauded out of $60,000. Below is the list of fake news articles.

Here is Nick in Luca’s podcast, the video is titled “NICK VON How I Made $5 Million in DOGECOIN!!!” (Spoiler: he didn’t make that much money):

Ironically, one of the articles mistook Luca for a German football player with the same name. Our advice to Luca is that next time he wants to manipulate his public image by buying fake news, he should proofread the articles about himself before the seller publishes them.

We believe he bought these articles to enhance his credibility as he is preparing for his biggest fraud to date, which he has been trying to cover up since the acquisition of Pudgy Penguins.

Netz Trade

Luca’s next attempt began in 2021 and he called it Netz Trade, which is a Discord group open only to subscribers, offering trading advice and “automated trading signals”. Around this time, he also launched a resale course worth $1,700. Through this course, we can see early signs of Luca’s success as he taught students to buy Instagram accounts with a large number of followers, purchase fake likes, and create false comments. Eventually, he even started providing sports betting signals.

To entice people to purchase these services, he showcased suspicious trading results, showing huge profits while bragging about the performance of his resale store. On his website, he used the logos of the fake news articles he purchased to increase his credibility, using the classic fraudster method of “as seen on”. Unsurprisingly, Yahoo and Business Insider did not publish any articles about him at that time, he simply inserted fraudulent promotions among all the fake articles.

The question we raise is why someone who is both a “trading expert” and an “8-figure reseller” needs to sell more than one paid group and multiple courses.

It can be said that certain business courses can provide value and be worth the money. After evaluating some of his courses, we can conclude that they are nothing special, and we believe there are better free courses available on platforms like YouTube. However, the problem arises when you start selling dreams to people, telling them to “join and start making money immediately”, when you overpromise and underdeliver, when you teach your “students” malicious business strategies that they will continue to use and harm consumers, and when you eventually abandon them.

Furthermore, why would someone who claims to want to help people and has paid thousands of dollars for a course that allegedly enables them to achieve financial freedom, encourage those paying individuals to engage in gambling? Here is a message from one of the Discord group administrators in Luca’s “sports signals” channel, encouraging members to gamble and use their referral links while doing so. He is enticing them to participate in something mathematically destined to fail, which has ruined countless lives, and he even boldly shares his referral links, remember, the casino only pays their commission when the people they refer lose money.

The Scam Gimmick of Saving Koalas

In one part of his premium course priced at $1700, Luca is teaching students the “secret insider methods”. The course provides detailed strategies on brand building, running advertising campaigns, and copywriting.

The focal product is a series of bracelets and necklaces purchased at the lowest cost from Chinese suppliers and sold at five times the purchase price. His marketing tactic is to sell these jewelry items as part of a charity initiative to protect the endangered Australian koalas from wildfires. According to his promotional claims, a portion of the profit from each purchase will be donated to save and protect these animals. Yes, you read it right, his entire course is about teaching people how to deceive those who have sympathy for Australian koalas suffering from the wildfires that were happening in Australia at that time.

Although we strongly doubt that Luca would actually donate a portion of the profit, apart from protecting himself from legal liability, even if he did donate half of the profit, it would still be a highly suspicious way of making money, almost considered fraudulent. What’s worse is that he has taught thousands of people, potentially creating a small army of “Burberry bandits” who deceive people by exploiting their empathy.

In another part of the course, Luca Netz discusses how to make a lot of money by creating a false sense of value for a random Chinese product. He achieves this by listing high-end products from well-known brands on his own website and marking them as sold out, leaving only his own products available for purchase. He also mentions that his friend had tried this strategy before, but he believed his friend failed because “no one put in the effort to get Instagram followers, buy likes, fake a lot of things, do similar things…”. He continues to show people where to buy fake followers, comments, and likes to make it easier to deceive their customers.

In mid-2022, Luca Netz apparently faced public criticism from Twitter users for his Netz Trades and courses. However, it was reported that the critical tweets received little attention and were later deleted due to Luca’s threats of legal action. The veracity of these statements has not been fully confirmed in the article, and the author is seeking more information from the person who posted the tweets.

Please note that the information provided is based on the content you shared and its accuracy may need to be verified.

We believe this made Luca realize that he needed to quickly distance himself from Netz Trades and Netz Commerce, so he did. He quickly shut down the websites netztrades.com and netzcommerce.com, and deleted their social media accounts. Thanks to web archives, we can still see what these websites looked like. Here are the links:

https://web.archive.org/web/20211207172136/https://netztrades.com/home1

https://web.archive.org/web/20211207032233/https://netzcommerce.com/homeLianGuaige-1

The monthly profits were too tempting for Luca, so he decided to merge Netz Trades and Netz Commerce into “Internet Accelerator.” He didn’t even bother to notify his members, who had to consult support representatives to find out why the name of the Discord server had changed.

Some members believe this is Luca’s response to Andrew Tate’s Hustlers University. They suspect that he created an all-in-one package to compete with him. In this package, you can follow their trading advice, use their automated trading signals, become an eight-figure earner like Luca, and view their daily sports betting recommendations.

Although this new all-in-one package does seem like one of the new scams Luca would try, and it’s likely one of his main motivations, we still believe that the main reason for the rebranding is to distance himself.

About 7 months ago, Luca posted his last message on Discord. Since then, the Discord has been gradually declining, with less and less activity, but still with hundreds of paid members. Another big issue is that many people purchased annual subscriptions or his $1700 Netz Commerce package, which gave them lifetime access to these groups. However, Luca decided to completely abandon them, not sending a single message for several months. Many of these people are Luca’s die-hard fans, and we believe they love Luca more than any Pudgy Penguin holder, because they believed in the dreams he sold to them. However, his actions show that he doesn’t care about them (his users) at all.

Like a traditional guru, Luca made it difficult for his subscribers to unsubscribe. If they want to unsubscribe, they have to contact customer service, and the response time can be quite long.

If you’re reading this, it’s very likely that Luca has already deleted the website of Internet Accelerator, so here is a web archive link:

https://web.archive.org/web/20221010015532/https://www.internetaccelerator.io/

We believe it’s only a matter of time before he and his partners abandon Pudgy Penguins, just like they did with other seemingly unprofitable ventures, and move on to the next scam.

Master of Scams

Another scam Luca attempted was to use his friend Noah Tucker as the face behind his course. He planned to teach him how to pretend to be a course master, which meant they would deceive people by claiming he had achieved success in e-commerce. He would have Noah showcase false results and have people write fake articles for him, just like he did.

Quoting Noah Tucker: “This is when we were making the course together, I don’t know if you remember, I really didn’t have any money when we started that course, I didn’t make anything.” So let’s think about it again, a worthless person is about to launch a course teaching others how to make money! They actually launched the course, it lasted for a while, they did advertisements, but eventually gave up. Luca went on to start Netz Trades and Netz Commerce, and you can see them discussing it in the following video:

Noah Tucker also has an article that we suspect is paid for. The article claims that he became a millionaire at the age of 20 through personal shopping. Our question is, why would a millionaire need a small investment from Luca to start his new business?

A few months later, Luca and Peter Lobanov (a shareholder of Pudgy Penguins) invested in Noah’s new company, SocialSnowball.

NFT Scams

Little known is that before acquiring Pudgy Penguins, Luca actually launched several other NFT projects. These projects were operated in secret by Luca and his team members. Here is the evidence we have collected.

The acquisition funds for Pudgy Penguins were provided by Luca Netz, Lorenzo Melendez (aka 0xLoMel), Ulysses Atkeson from Cowboy Labs (also known as UnLink, CowboyUly), and Charles Kieu (aka ICanPlug, evaded, evaded.eth). On the day of the Pudgy Penguins purchase announcement, funds were received at this address, and approximately 68% of the funds were subsequently sent to Coinbase’s deposit address, which had been previously used by the deployer of Pudgy Penguins. The wallet used for the purchase was/has been controlled by Luca, as later transactions sent the funds to an unmarked alternative wallet owned by Luca.

Funds provided by Luca and the Cowboy Labs team can be traced back to multiple dump projects. Specifically, Luca and Cowboy Labs’ Spooky Boy Country Club (SBCC), their sister series Spooky Boy Mansion LianGuairty (SBMP), Demi Gods Universe (DGU), Donut Shop (DS), and Cookies N’ Kicks (CNK). All of these projects, in part or in whole, failed to deliver on their initial promises and roadmaps.

SBCC appears to be the first project where Luca acted as a founder or held the position of “board member” according to the team page on the SBCC website. However, when examining the on-chain activities of the SBCC deployer wallet and the source of deployer funds, Luca’s identity as a board member is questionable.

The funding wallet of the SBCC deployer, 0xa0ce (SBCC Funder), is one of Luca’s early personal wallets. This connection is easy to establish for two reasons. The first is that SBCC Funder transferred the “sales” of BAYC #9608 to Luca’s current public wallet 0x3f8c, and the proceeds from this sale were sent to Coinbase’s deposit address. This Coinbase deposit address has received deposits from both SBCC Funder and Luca’s confirmed alternate wallets, and this connection was strengthened in a specific case where the deposit address received funds from both wallets mentioned above within a span of 13 seconds, only one Ethereum block (Tx 1, Tx 2). The second connection proving that the alternate wallet associated with Luca has sent and received ETH from each other over the past two years, with records from September 4, 2021, to April 9, 2023. It is actually simple to prove that this wallet belongs to Luca. SBCC Funder has both received and sent funds to Luca’s main wallet and alternate wallet over the past two years (Tx 1, Tx 2, Tx 3, Tx 4, Tx 5).

After extracting minting funds from the SBCC contract, the SBCC deployer distributed the funds to ten main wallets and some other wallets that received a small amount of funds. Eight of these main wallets can be confirmed as belonging to Luca through on-chain activities. These eight wallets include Luca’s main wallet, SBCC Funder, and a wallet used in Luca’s future liquidation project DGU. The remaining two wallets are cowboylabs.eth and minecraftco.eth. Minecraftco.eth seems to belong to a collaborator who has worked on some early projects with Luca, possibly a marketing director. This address has multiple transactions with known marketing service providers, including Snow Promotions. Interestingly, it seems to be the starting point of Luca’s collaboration with the Cowboy Labs team, as approximately 76 ETH was sent from the SBCC deployer to cowboylabs.eth.

The sister series of SBCC, SBMP, was deployed 36 days later, raising approximately 575.5 ETH. Within six days after the initial deployment of the contract, the majority of minting funds were distributed to Luca’s seven wallets, including four alternate wallets, his main wallet, and SBCC Funder. The remaining funds were sent to an unmarked Cowboy Labs address, minecraftco.eth, and various miscellaneous wallets. The third collectible, SpooKeys, was also released, but it was free for existing SBCC and SBMP holders.

By paying attention to simple ETH transfers between these alternate wallets and Luca’s main public wallet, sharing transaction deposit addresses with other wallets confirmed to belong to Luca, or subsequent activities with confirmed alternate wallets belonging to Luca, all of Luca’s alternate wallets can be traced.

Address activity chart:

https://metasleuth.io/result/eth/0xf7ae375da3bc2be346157159cedc2d2effe7797fa6f2622c347506b2a758a1cb?source=b6b9331e-28f6-4f5e-8e4d-0b2bb3b049dc

On January 9, 2022, Luca created a group chat with his partner Nick and someone who provides NFT promotion services, asking about the services they offer. When asked which projects they wanted to promote, Nick replied, “Demigods Universe and CNK World.” They were looking to purchase “Telegram promotion” services. The anonymous source that provided these screenshots requested to remain anonymous.

By reaching out to some of his colleagues, we have confirmed that this is Luca’s phone number. When we added this number to our WhatsApp contacts, Luca appeared in the profile picture. When we searched on Telegram, it had a Pudgy avatar. In the image below, you can see most of this number. We don’t want to leak the entire number to avoid violating Twitter’s guidelines, but we left a part of it so that anyone who has his number can verify that it is indeed him. In addition, some members of the Netz Trades Discord also suspect that Luca is the person speaking in the Demigods’ Twitter space.

By searching for his friend’s number on Telegram, we found an account @nicholasravid, who claims to be a co-owner of Pudgy Penguins in his profile.

Luca is also the fifth largest holder of Demigods, holding 9 CNK. Here is his public wallet address:

https://etherscan.io/address/0x3f8cD3cc58391E704A2A0fab2482B8116Cb9D670

Demi Gods Universe

Luca’s next pump project is Demi Gods Universe (DGU). DGU seems to be the first “official” collaboration project between Luca and Cowboy Labs. This can be proven by cowboylabs.eth providing initial funding for the DGU Deployer. Approximately five days after the contract deployment, 272.28 ETH was extracted from the DGU contract between two transactions and distributed to wallets controlled by Luca (the wallet also received minting funds he obtained from SBCC), Luca’s Coinbase deposit address, Luca’s alternate wallet, minecraftco.eth, an unmarked Cowboy Labs address, and a Gnosis Safe.

This Gnosis Safe briefly collected royalties from the DGU series (which was quickly emptied and funds were sent to a wallet likely controlled by jay724.eth). Overall, Luca received about 63% of the minting profits from DGU. Within nine minutes of receiving his minting funds share, 5 ETH was sent to the aforementioned Coinbase deposit address, confirming that it indeed belongs to Luca.

Most of the funds Luca received from DGU minting will be aggregated into a wallet that has been inactive for nearly 50 days. After the first outgoing transaction from that wallet, 41 days later, 250 ETH was provided to purchase Pudgy Penguins.

Address activity chart:

https://metasleuth.io/result/eth/0xce1435b7580aa99793a6ca6e492a0250852cffd1a1bafc0f569500cc7f0c9cfc?source=a71ad53a-d374-4011-be46-841322f95ea2

This project was launched on December 21, 2021, and a total of 3120 NFTs were minted. The price for each NFT was 0.1 ETH, bringing a profit of 312 ETH to Luca and Nick, which was worth $1.37 million at the time.

Based on the average price of the last 10 sold NFTs, their prices have dropped an astonishing 99.84%, with each NFT being worth only $0.74, while the minting price was 0.1 ETH.

They decided to shut down their Discord and their website, but with the help of the Web Archive, we are able to see what their website looked like at the time and investigate all the promises they made.

https://web.archive.org/web/20211223030424/https://www.demigodsuniverse.com/

Below are a series of promises:

“(Q4 2021) – All minters will receive exclusive access in Discord and will start benefiting from this universe.” – Discord has been closed since then.

“(Q4 2021) – Once all the demi-gods have been bestowed their path by the universe and assigned to their factions, each faction will receive an airdrop of a secret weapon. This secret weapon will serve as a voting mechanism in our Demi Gods Universe DAO, and the demi-gods will be able to use them in the eternal war. The secret weapon lets demi-gods choose how they want to fight in the eternal war.” – The DAO was never launched, there is no “eternal war,” and the weapons have no actual use.

“(Q1 2022) – The first comic series of Demi Gods Universe will be released. Holders of Demi Gods will benefit greatly from the comic. Holders of Demi Gods will receive a 30% share from the exclusive Demi Gods comic book sales. The features used in the comic will also receive an additional 40% share of the sales, on top of the 30% allocated to the holders. This 40% depends on the characters, features, and factions in each comic series. Additionally, if you are the sole holder, you will receive a total of 5% of the comic book minted each quarter.” – The comic series was never released, and holders did not receive any rewards.

“(Q2 2022) – Demi Gods Universe will collaborate with another NFT that we will showcase in our comic book. This will allow new Demi Gods to join the universe, and we will provide more utility through the collaboration. Holders will receive the same benefits as before, and the commanders of Demi Gods Universe will ensure that the collaboration is strategic to maximize value for the universe and its holders.” – Nothing happened.

“(Q3 2022) – Demi Gods Universe plans to publish physical comic books! We will collaborate with the best publishers and the best comic book artists to launch our physical comic books. Holders will receive a 5% share of global comic book sales and will be invited to our official launch party!” – Holders did not receive any sales percentage, and the official launch party was not held.

According to the information provided, these individuals have clearly participated in securities fraud through misleading statements. These deceptive promises include financial benefits and potential monetary returns related to a certain percentage of comic book sales that were not realized, as well as other benefits. Therefore, it is evident that their actions have violated legal and ethical boundaries.

Luca and Nick also publicly announced on their Twitter that everyone who purchases their NFT will automatically participate in a Bored Ape Yacht Club (BAYC) giveaway event worth $250,000. However, this giveaway event never took place, and they effectively deceived everyone who participated in the NFT purchase. This involves significant violations of multiple US laws and likely constitutes fraudulent misrepresentation and telecommunications fraud. We hope that the relevant US authorities will take appropriate action.

Please note that I am not a lawyer, and this information does not constitute legal advice. It is advisable to consult a legal professional specialized in such matters for specific guidance.

We have also discovered that this project has to some extent replicated “Divine Anarchy.” Both projects employ similar anime-style designs, promise the release of comic books, offer similar perks, mention an eternal battle between good and evil, and plan to airdrop certain items to aid them in these “battles.” “Divine Anarchy” airdropped animals, while “Demigods Universe” airdropped weapons.

Interestingly, “Divine Anarchy” was initiated by Luke Belmar, who abandoned it shortly after due to a problematic minting contract, resulting in a loss of $3 million. Luke Belmar is also a shareholder of Pudgy Penguins and a long-time friend of Luca Netz. We will investigate this further.

CNK World

The last project Luca collaborated on with Cowboy Labs is Cookies N’ Kicks (CNK). On the first day funded by cowboylabs.eth, the CNK Deployer extracted 234.08 ETH from the CNK contract and divided these funds into two parts. One part was deposited into a Kraken deposit address owned by Cowboy Labs, and the other part was deposited into an intermediate wallet for further fund diversification. These funds were primarily allocated to Luca’s main wallet, Luca’s alternate wallet, an integration address owned by Luca for Pudgy Penguins acquisitions, and two Coinbase deposit addresses that likely belong to Luca. The remaining funds, approximately 30%, will be distributed to various other wallets not controlled by Luca.

Address activity chart: https://metasleuth.io/result/eth/0x483b29deb863d43a630a23262eb90225a599655ec9e1a180dcaa930ad79b8721?source=ecd72eca-e9b6-4d03-8d58-33c179c3cb8d

During our research on CNK, we found that a YouTuber has already released two videos about this scam. These videos do not mention the connection between Luca and his other scams and primarily focus on the second owner, Eli Hyman. However, regardless, if you are interested, we recommend watching these videos.

Part 1: https://www.youtube.com/watch?v=YjluOX2qOWo

Part 2: https://www.youtube.com/watch?v=i3Wb52-u-zk

CNK stands for Cookies and Kicks, a sneaker store located on Melrose Ave in Los Angeles. One of its partners is Luca Netz. He has openly discussed his involvement with the store and, based on the texts we shared, we can see that he is consulting CNK for marketing services. He even participated in a podcast titled “Luca Netz – The Shopify Giant Behind Cookies N’ Kicks.” Here is an excerpt of him talking about the topic:

In addition to the Demigod scam, Luca also decided to launch this NFT scam project, CNK World, using the brand of his sneaker store, Cookies N’ Kicks.

So far, any mention of CNK World has been deleted from the Cookies N’ Kicks’ social media. Their Twitter account has been deleted, their username has been taken by someone else in February, all discussion channels in their Discord have been deleted, and all posts on their Instagram page have been deleted. Today, only their website cnkworld.io is still active.

We suspect that they may have deleted their website after our research was published, so here is the Web Archive link to their website:

https://web.archive.org/web/20220209092537/https://www.cnkworld.io/

To promote this NFT project, they purchased ads from Instagram pages and TikTok influencers. Here is an email they sent to a TikToker asking about the cost:

One paid ad specifically mentioned the rapid growth of CNK and how they quickly gained 80,000 members in Discord. Considering that only 0.43% of CNK Discord members are active, we believe Luca purchased and added fake members and followers to his social media pages to create the illusion of credibility and value, just like he teaches in his course (teaching clients how to create fake marketing).

The initial release of CNK World’s NFTs was on February 9, 2022, with a minting price of 0.1 ETH. A total of 3,150 NFTs were minted, generating a profit of 315 ETH, which was valued at approximately $961,000 at the time.

Based on the average price of the last 10 NFTs sold, they were traded at an astonishing $9.1 each, a 97% drop from the minting price.

Here are some promises they made:

Just like other projects these scammers are involved in, they announced on May 12, 2022, that they are abandoning this project.

Below is the message posted by Eli Hayman, the co-owner of CNK, on the Discord announcement channel, proposing two options for their NFT holders. Option A is that they will introduce a new team to replace them, and option B is that they will transfer ownership to the community. The full message is as follows:

Ironically, in this message, they say “we have absolutely no intention of disappearing, nor do we intend to stop taking the necessary measures to position this project for future success. We are definitely not a Rug-pull.” However, they did exactly that, as their last announcement on Discord and last activity on social media were 11 months ago.

Even the actual sneaker store has closed down, apparently, as most of the employees decided to leave after realizing the fraud committed by the owners.

This behavior of abandoning projects has occurred in every project behind these people, and as we investigate more fraudulent behavior by this team, you will see more examples of this nature. That is why we believe that these people are not suitable to operate Pudgy Penguins or any other business, and it is only a matter of time before they abandon this project and defraud more people in the process.

Acquisition of Pudgy Penguin

The funds used to purchase Pudgy Penguins were obtained through fraud from thousands of investors who were previously involved in various fraudulent projects by Luca. These projects include projects owned and guided by Luca, such as SBCC, SBMP, DGU, and CNK, as well as projects where Luca provided advice or other assistance, including Skulltoons and DS. The proceeds from these projects can be directly linked to the address used to purchase Pudgy from Cole.

The Pudgy Penguins acquisition address can be easily confirmed as it received a total of 2.2 million USD worth of ETH from various exchanges, as well as wallets owned by Luca and Charles Kieu. Within the next 10 minutes, 662.75 ETH was respectively allocated to the Coinbase deposit address and another EOA, receiving 33% and 67% of the funds, respectively.

The Coinbase deposit address was previously used by the original deployer wallet of Pudgy Penguins and by jonahtj.eth. This EOA is likely owned by Cole, as the same address was used for the Blur airdrop of MyFuckingPickle, a project he founded, as well as CryptoFoxes, a project he assisted in promoting. 23 minutes after the funds were split, the official Pudgy Penguins Twitter account and Luca would tweet about the acquisition.

The first address to send funds to the acquisition wallet is Pudgy LianGuaiyer 0x82Ad. This address serves as an integration address for Luca’s SBCC and DGU payments, as well as Luca 0x59B8’s integration address, which have interacted with each other and have sent or received funds to Luca’s main wallet or SBCC Funder (which we have previously confirmed is owned by Luca). Pudgy LianGuaiyer also received funds from Luca’s main wallet and CNK’s intermediary wallet. The second address to send funds to this address is the intermediary wallet of Skulltoons.

This address is the main recipient of minting funds, with ETH being dispersed to various wallets, including four Luca substitute wallets (as well as other wallets related to Luca), totaling 41.81 ETH, as well as a total of 100 ETH from Pudgy LianGuaiyer.

20 hours later, Luca’s main wallet sent a total of 19 ETH to the acquisition address through two transactions; one hour later, an alternative wallet funded by Luca from Skulltoons and DS sent a total of 31.75 ETH.

Address activity chart:

https://metasleuth.io/result/eth/0x9998de6a33ba91c0b1e44f7d59b01614d7b32a28edba100649baae06e8da8559?source=bdba7e05-a1ed-4cf3-a093-76ec46f4f80c

The Assetbender

Luke Belmar, or as he likes to call himself “The Assetbender,” is a long-time friend and business partner of Luca Netz. He previously served as the Chief Marketing Officer (CMO) and shareholder of Pudgy Penguins, and we believe that a significant portion of the funds contributed to the purchase of Pudgy Penguins from exchanges were his, making him a 30% shareholder of Pudgy Penguins. Like Luca, he also launched an NFT project, has a paid membership group, and offers multiple courses and ebooks on cross-border e-commerce.

If you search for him on Google, you will find a LinkedIn search result where we can see that he claims to be a shareholder and former CMO of Pudgy Penguins. This has been removed from his LinkedIn profile but still appears in the metadata of LinkedIn search results. Let’s take a look at some of his entrepreneurial projects.

In mid-2021, Luke launched Capital Club, a $40 per month subscription service that grants people access to his private Instagram stories. He claims to allow only 400 people to join, which, if we believe what he says, means he can make a profit of $16,000 per month from it.

Luke promises to share “value” and “secret methods” in his private stories, but he also promises to use 100% of the subscription fees to fund the development of the Capital Club application. This application was supposed to be an all-in-one platform where members can engage in discussions, and he also claims that he will invite some top health experts, financial experts, and lawyers to join the application. Early subscribers were promised lower prices and some additional benefits.

Over two years have passed, and Luke still hasn’t launched this application or provided any updates or explanations to subscribers. Like Luca, he also makes canceling this subscription very difficult, requiring contacting customer service via email and going through a lengthy process to cancel.

Here is a receipt shared by a previous member:

A few months later, Luke felt the upcoming NFT wave and decided to shift focus to launch an NFT collectible. This collectible was later duplicated by Luca Netz, who launched Demigods. We cannot confirm whether Luke was involved in the Demigods project.

On November 6, 2021, Divine Anarchy was launched. They sold the entire collection of 10,000 NFTs for 0.09 ETH each, bringing in a profit of 900 ETH, valued at approximately $4 million at the time.

Their minting contract had a flaw, instead of checking the available numbers beforehand or writing a simple require statement to check if the supply had been exhausted, the contract was designed to continually attempt generating random numbers and check if they had been allocated. However, after all 10,000 NFTs were minted, it became apparent that these numbers had already been allocated, leading to an infinite loop in the contract that kept running until all the Gas was consumed, resulting in over $3 million in losses for those attempting to mint. On the day of minting, Divine Anarchy project charged a 30% miner fee.

Although they made $4 million from the minting, they decided not to refund any funds to the affected individuals, many of whom had spent thousands of dollars on Gas fees and received nothing in return. They only promised to launch another NFT collectible, which was an extension of Divine Anarchy, and airdrop it to the affected individuals.

Shortly after, Luke decided to abandon this project and handed it over to the rest of the team, following a pattern similar to his other friends.

The team seemed to continue working on the project, developing some features and airdropping a batch of NFT collectibles to those affected by the flawed contract. Unfortunately, these NFTs turned out to be worthless.

After giving up on his own project, Luke decided to engage in a new fraudulent activity. He used the proceeds from the sale of the Divine Anarchy project to buy Pudgy Penguins together with Luca.

He also launched a YouTube channel called “red-pill” and used his newly accumulated audience to relaunch Capital Club. However, he did not provide the promised application but launched it on Discord instead.

Faiz Warsani

Faiz Warsani is one of Luca’s close friends. He also launched an NFT project, had a cross-border e-commerce course, and created his own trading group. So far, we can see a recurring pattern.

Like Luca, Faiz also bought fake news to create an illusion of credibility. Here are 6 fake news articles that we found, published by media outlets known for selling such services, all within one month.

His course website is now offline, but through web archives, we can see what his website looked like and that his course was priced at $500, link:

https://web.archive.org/web/20210226090241/https://www.futurcommercecourse.com/

Donut Shop NFT

Donut Shop is a project launched by Faiz Warsani in collaboration with Cowboy Labs, with support from Luca and “Laboratory 721”. The NFT sale took place on February 6, 2022, three days before Luca’s CNK World NFT. Like every other project, Donut Shop NFT failed to deliver according to its roadmap and promises.

Two days after deployment, the Donut Shop Deployer (DS Deployer) extracted 673.64 ETH from the Donut Shop contract and distributed 84.5% of the funds to various wallets controlled by Faiz Warsani, 5% to Luca, approximately 7% to Cowboy Labs, approximately 2% to Laboratory 721, and the remaining 1.5% to various other wallets. Luca’s share of the funds from DS minting will be divided among Coinbase, his main wallet, and his alternate wallet, with the remaining funds used to artificially raise the floor price of his next collection, Cookies N’ Kicks, which will be released the next day.

Part of Faiz’s funds were used to artificially raise the floor price of DS by purchasing 50 DS NFTs.

Address activity chart:

https://metasleuth.io/result/eth/0x1b36966cfe5fb2dacc424875351da08e62ef1e5f17bf2a6930e770b1d066cde5?source=77e51fbe-2eb1-4fc2-a581-b4ced26afc36

They sold 5432 NFTs at a price of 0.12 ETH per NFT, bringing in a profit of 652 ETH, worth $1.96 million at the time.

Based on the average price of the last 10 NFTs sold, they were traded for an astonishing $19 each, which is twice the price of CNK trades and quite impressive. However, unfortunately, this represents a 95% drop from the minting price.

Given the fact that only about 3% of Discord members were online, we suspect that Faiz also purchased fake Discord members and fake social media followers to fabricate credibility, just like Luca did in his two projects.

Of course, this project was abandoned a few months after its launch, with none of the promises being fulfilled. The website was shut down, and the last Discord announcement was made 10 months ago.

Website web archive link:

https://web.archive.org/web/20220706000305/https://www.donutshop.io/

Ironically, their last announcement said, “We’re almost there, almost there!” and then they decided to remain silent for the next 10 months.

Apart from being Luca’s good friend, let’s see what other factors connect Faiz to Pudgy Penguins.

Bureaux is a design company owned by Peter Lobanov, Luca’s business partner, childhood friend, creative director, and co-owner of Pudgy Penguins.

Bureaux is responsible for developing websites and creating product models for Faiz’s company sweetdreams.io. They worked with him before the launch of Faiz’s NFT and continue to work with him after the launch. This strongly suggests that Bureaux also developed the website for Donut Shop, as the design style of the website is very similar to that of this design company, and all of this can be seen on their website bureaux.inc.

In the past two years, Faiz has also produced two podcast programs with Peter, and the most recent one even included Luca. Here are the links:

1. https://www.youtube.com/watch?v=2YLdfMcBOpo

2. https://www.youtube.com/watch?v=e7LlGOrvf88

In one of the podcasts, Peter teased Faiz about Donut Shop. You can watch the video below to see how uncomfortable he looks:

In addition, he also participated in the recent Pudgy Penguins event. Although we cannot verify whether Faiz is a shareholder of Pudgy Penguin, based on the information we have found, we strongly suspect that he may be.

Faiz Trade

As mentioned earlier, Faiz used to start his own paid Discord group, but due to a lack of members, he closed it and joined Netz Trades as the new “Stocks and Options Administrator” and shared the profits.

Furthermore, below you can see a photo of Luca, Faiz, and Mikey. Mikey is another close fraud friend of theirs and also an expert in cross-border e-commerce. He recently participated in the Pudgy Penguins event as well, but we won’t go into detail about him this time. Here is a video about him made by Coffeezilla almost two years ago:

Link: https://www.youtube.com/watch?v=5A-fFF571F8

Nick Von, also known as Louis Vuitton Don

Let’s meet Nick, another scammer in this group, a long-time friend and business partner of Luca. Like Luca, Nick Von launched a paid trading group and has been involved in countless cryptocurrency frauds. If that’s not enough, he deceived dozens of people, including his girlfriend and even his own grandmother.

First, let’s get to the most striking part. Recently, Nick’s girlfriend has been exposing him, accusing him of using her money, car, house, and even clothes to show off on social media, and then using the notoriety gained from showing off to deceive dozens of people.

She has made many videos about this matter, and here are some examples. To see more videos, please visit her Twitter. They are truly incredible: https://twitter.com/nickvonscammer.

As you can see, she carefully decorated the cars that Nick used to show off.

Like many of his other friends, Nick also purchased a lot of fake news. Here are 10 fake articles we found:

When we spoke to his girlfriend, she claimed that he took about $100,000 from her and said he was using that money to trade NFTs. He also told her he had inside information about “Pudgy Penguins.” We suspect he was involved in the acquisition because there was a significant increase in trading volume before the announcement, indicating that he and his friends likely used insider information to buy NFTs and then sell them off.

Here’s a quote from her: “Initially, I planned to expose him as a fake millionaire and reveal that his flaunting on TikTok was all for show. However, as I delved deeper, I uncovered the fraud and deception network that Nick Von had been weaving behind the scenes. It turns out that he has been running a large-scale scam for years, along with his two accomplices. Over the past five years, victims have started coming forward, providing evidence that Nick Von has scammed them out of amounts ranging from $6,000 to $600,000, totaling over 20 victims and more than $5 million. I had no idea that he was using the assets I provided him to support his fraudulent activities.”

If you want to learn more about how Nick Von deceived his girlfriend, please visit the website she created specifically for Nick Von: https://www.lascammer.com/.

In a voice message that Nick Von sent to his girlfriend, we can hear him talking about his long-time friend Luca inviting him to create a trading group. He thought it was a great idea to showcase “his” assets and then use the trading results provided by Luca as his own achievements to attract people to join the group and pay for it. We recommend that you check it out and listen to his way of presenting things. Here is the audio file link:

https://drive.google.com/file/d/1O1VFpgM43m6GMvBC960ELPSRJXyY_tPQ/view?usp=sharing

Although we cannot verify if he was involved in the acquisition, here are the reasons we strongly suspect:

• Nick Von has been Luca’s business partner for over 5 years. They have started multiple businesses together, claiming to have exited a business valued at $18 million.

• Luca invested in Nick Von’s email agency inboxprofits.io, which reportedly closed because Nick Von deceived one of the clients.

• Nick Von’s girlfriend claims he took her money to buy Pudgy Penguins based on “inside information.”

• He promoted them on social media.

• He is a member of Netz Trades (a scam community that teaches people how to trade stocks), and in addition to the voice message we showed, he also played a role in a group called “Netz Team.”

This is the link Luca used to promote Inboxprofits: https://twitter.com/netz_commerce/status/1385018669353234432

This is the content extracted from one of their fake news articles:

Nick Von Geijer & Luca Schnetzler Discuss Building an eCommerce Empire through Social Media

On his website, among other false statements, he claimed to have achieved $50 million in sales in July 2021, and just one year later in April 2022, he increased that number to $500 million in sales.

Nick deceived dozens of people and swindled millions of dollars. Here are some examples and testimonies of the victims. First, here is a report from the United States Federal Bureau of Investigation regarding Nick.

Testimonies from some of the victims on how they were deceived by Nick:

Here is a video link explaining how Nick deceived his grandmother, provided by his girlfriend.

Furthermore, Luca’s Discord channel facilitated manipulation and dumping of “shitcoins” dozens of times. Members would create a “shitcoin” and then invade other Telegram and Discord channels, spamming their Telegram invitation links. Of course, these members would only buy during the pre-sale period and then dump the coins on others after they were listed.

Many Netz Trades administrators also launched a large number of “shitcoins” and NFT projects themselves.

https://poocoin.app/tokens/0xc3ea844a150d8d40fc2411973a4a23d010c7ab0b

https://web.archive.org/web/20210610192512/https://sheltercrypto.com/

Cxesar is one of the administrators of Netz Trades and is responsible for launching many “shitcoins” and NFT projects. He is also one of the people behind the “Yummy” shitcoin.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!