Brazilian prosecutors are investigating the company over Amazon Forest NFT sales

NFT company Nemus encourages environmentally conscious customers to help preserve the rainforest, but the indigenous people say they have rights to the land

• Confusion over ownership of rainforest land linked to NFTs
• Indigenous people not properly consulted, says the prosecutor
• Case flags challenges in using digital assets for preservation

By Andre Cabette Fabio and Avi Asher-Schapiro

RIO DE JANEIRO, July 29 (Thomson Reuters Foundation) – A Brazilian firm that sells non-fungible tokens (NFTs) that it says are tied to physical land in the country’s Amazon rainforest has been asked by Brazilian prosecutors to prove its ownership to the land, which is on territory claimed by the indigenous people.

Prosecutors have given Nemus 15 days to show that the land belongs to it and have accused the company of pressuring indigenous people in the region to approve documents they could not understand.

“People from the company delivered a sign to the villages, written in English, asking the indigenous people, who can barely read, to sign documents without clarifying the content or providing a copy,” said a public statement from the prosecutor’s office. July 25, without specifying further.

Federal prosecutor Fernando Merloto Soave told the Thomson Reuters Foundation that his office had decided to publicize the situation in the media to raise awareness.

“The company advertises that indigenous people are benefiting from it, but at the same time, some of them came to us to denounce that they do not know what is going on,” he said.

Soave said his office was trying to determine whether the land is privately owned, but added that this would be invalidated if the territory is recognized by the federal government as indigenous.

He also said that it was clear that the indigenous people had not been consulted on this matter, as required by the International Labor Organization.

Nemus – whose tagline is “Treasures of the Forest” – sells NFTs that it says are a digital representation of real parcels of land in the Brazilian Amazon.

Buyers, called “guardians”, do not get ownership of the land itself, but the company guarantees that their money will be used to preserve the forest and support the people who live there.

Buyers receive a trading card that can be exchanged for game rewards.

NFTs are a digital asset found on the blockchain, a record of transactions held on networked computers. All types of digital objects – including images, videos, music and text – can be bought and sold as NFTs.

In a statement to the Thomson Reuters Foundation, Nemus said it had “requested and received formal approval from FUNAI (Brazil’s Indigenous People’s Agency) to navigate along the Seruini River”, which is the traditional access route to the region where the land underlying the NFT- one is located.

A promotional video issued on July 20 by Nemus shows Silvio Antonio de Souza, a man from the Apurinã indigenous community, going to the local notary’s office and allegedly changing the name of the land claimed by the company to “Non-fungible territory”, in a play with the NFT acronym.

Antonio de Souza could not be reached for comment, but his son told the Thomson Reuters Foundation that his father was not given a copy of the document.

Normally, changing the name of the area would require consensus among the entire community, said Daniel Lima of the Indigenous Missionary Council (CIMI), a Brazilian non-profit group.

COUNTRY DISPUTE

Nemus says it owns 41,000 hectares of forest in the Amazon. On its official website, the company provides a digital map of an area in the municipality of Pauini, in the state of Amazonas – one of its plots already divided into hundreds of squares, each corresponding to one NFT.

But Melquisedeque Lopes Soaris Apurinã, a local indigenous leader, told the Thomson Reuters Foundation that the NFT company’s claim to the land was illegitimate.

“(Nemus) said they would buy the land and give it to us. But we were already living there — our veterans, grandfathers and great-grandfathers all died there,” he said.

“They say they want to buy the land to preserve the forest. But we are conservationists, we have been here a long time and it was never deforested.”

Apurinã leaders say the land is in an area that has been going through a government process since 2012 that could lead to the land being officially recognized as the territory of the Apurinã people.

CIMI worked with community members to alert Brazilian prosecutors about the NFT situation, according to Lima.

According to official maps from the state of Amazonas consulted by CIMI and another green group, IPAM Amazonia, the territory is classified as a public forest – although such maps do not always record private ownership.

In a telephone interview with the Thomson Reuters Foundation from the US state of Florida, Nemus founder Flavio de Meira Penna denied claims by CIMI that the land is public property.

“I don’t know where this came from – it (the land) is private; it belonged to a family from Sao Paulo for more than 40 years,” Penna said, adding that the family had owned a nut plantation in the area.

This information is consistent with the statement of Nemus, who noted that the territory “is not in any indigenous land or reserve” and is “duly registered in the notary public of Pauini”.

Land ownership is a constant source of dispute in the Brazilian Amazon. The Brazilian constitution guarantees indigenous communities the right to traditional territories.

But parts of the forest have historically been transferred to non-indigenous private owners.

The Amazon is also plagued by a centuries-long practice of illegal privatization through land seizures – some of which have been retroactively recognized by the authorities as legal.

GREEN BLOCKED

Nemus is part of a growing constellation of cryptocurrency companies that say they want to leverage blockchain technology to help conserve nature and fight climate change.

Other initiatives include turning carbon offsets into digital tokens, initiatives to log forest conservation programs on digital blockchain ledgers, and projects to create crypto-based financial derivatives to fund green projects.

In an interview with Reuters in March, Penna said he hoped to raise up to $5 million to buy another two million hectares of land already under negotiation in Pauini.

Buyers of Nemus NFTs – which cover plots from a quarter of a hectare to 81 hectares, and cost as little as $250 – said they expected their money to go towards conserving the rainforest.

Bhavesh Bati, a solar entrepreneur who recently bought an NFT from Nemus, said it was “always my dream to buy rainforest land and set it aside fully protected”.

“In Nemus I saw that I can buy a parcel and with my little money I can help with conservation work there on the ground,” he added.

John Reed Stark, a former head of the Office of Internet Enforcement at the US Securities and Exchange Commission, told the Thomson Reuters Foundation that people who buy NFTs rarely understand what they are buying, which can lead to them being misled.

“I’m not surprised by the fact that someone would use the hook (that) you’re helping the rainforest sell an NFT,” he said.

Related stories:

IN FOCUS-Amazon forest and climate change

In Ecuador’s Amazon, indigenous forest defense is gaining legal ground

Colombia’s indigenous people form ‘mini-government’ to save Amazon

(Reporting by Andre Cabette Fabio and Avi Asher-Schapiro; Editing by Barry Malone and Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers the lives of people around the world who struggle to live freely or fairly Visit

Our standards: Thomson Reuters Trust Principles.