Brazil probes company that sold NFTs of Amazon rainforest land

Brazil's Nemus has been given 15 days to provide proof of ownership of the land to which the NFTs are linked. The land is located in the Pauini, in the southern region of the rainforest, an area which is the size of Belgium. 

Federal prosecutors have accused the company – which claims to encourage eco-conscious customers to help preserve rainforest land − of pushing indigenous people in the region to endorse documents they could not understand. 

The sale of the NFTs was reported to authorities by leaders of the Apurinã people, who traditionally occupy the claimed indigenous territory of Baixo Seruini/Baixo Tumiã, in the Amazon, as stated by a press release published by the prosecutor's office.

The indigenous leaders claimed that Nemus' activities directly violated their rights, as stated in Convention no. 169 of the International Labour Organisation (ILO), which includes prior, free and informed consultation with potentially affected peoples in the Seruini River region and in the municipality of Pauini.

"People from the company delivered a sign to the villages, written in English, and asked the indigenous people, who can barely read, to sign documents without clarifying the content or providing a copy," the document reads. 

According to reports from the indigenous people, Nemus expressed an interest in exploring the chestnut groves located within the territory and used heavy machinery to open an airstrip and road between the Seruini River and the municipality of Pauini, without providing further clarifications, documents or formal authorisations from public bodies.

Nemus - whose slogan is ‘Treasure the forest’ – sells NFTs it says are a digital representation of real pieces of land in the Brazilian Amazon. Instead of obtaining physical ownership of the land, buyers become "guardians" of the territory and receive access to key information about its preservation, from satellite imagery to licensing and other documentation.

The money made from the sale is reportedly used to preserve the trees, regenerate clear-cut areas and foster sustainable development efforts such as harvesting acai berries and Brazil nuts by local communities in Pauini. 

However, representatives of these communities claim not to have been informed of the company's activities.

“The company advertises that indigenous people are benefiting, but at the same time a part of them came to us to denounce that they don’t know what is happening,” Federal Prosecutor Fernando Merloto Soave told the Thomson Reuters Foundation.

Merloto Soave revealed that his office was trying to work out if the land is privately owned, but that this would become invalid if the territory is recognised by the federal government as indigenous. He also said it was clear that indigenous communities had not been consulted in this case, as required by the ILO.

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

The statement added that the territory included in the NFTs “is not in any Indigenous Land or Reservation” and is “duly registered in the Public Notary of Pauini”.

Last March, Nemus founder Flavio de Meira Penna said the company had sold 10 per cent of an initial offer of tokens for 8,000 hectares on the first day. In total, Nemus claims to own 41,000 hectares of Amazon rainforest.

Currently, official maps of the territory list the land as a public forest, although such maps do not always log private ownership. However, Apurina leaders say the land sits in an area that has been going through a government process since 2012 that could lead to its official recognition as territory of the Apurina people.

NFTs are forms of Ethereum blockchain that represent digital assets. Some of the most popular NFTs are digital forms of artwork, but many digital objects - from tweets to digital perfumes - can be sold as an NFT. The most expensive NFT to date was ‘The Merge’, a digital artwork created by anonymous digital artist ‘Pak’ which sold for $91.8m (£75.4m) in December 2021.