No, it was not born in the favelas. The article is right. The Gracies were never poor and never lived in favelas. I'm a Brazilian with a pretty good knowledge of BJJ history (my father watched Helio's fights, etc).

Yes, he is mistaken. BJJ is certainly practiced in favelas, and there are people who use it to give youths something to do, as a way to keep them away from crime, drugs, etc.

See the Tererê Kids Project, for instance: http://fightland.vice.com/blog/social-change-through-jiu-jit...