Cryptocurrency Firm in São Carlos Avoids Tax Payment Due to Low Debt
A legal battle between the São Carlos City Hall and a local cryptocurrency company has ended with a favorable outcome for the crypto firm. The court dismissed a tax enforcement action, citing the relatively small amount of the debt.
According to Resolution No. 547/CNJ of 2024, signed by Minister Luis Roberto Barroso, debts below R$ 10,000 (approximately $2,000 USD) can be waived.
“Article 1: The dismissal of low-value tax enforcement actions is legitimate due to the constitutional principle of administrative efficiency, respecting the constitutional competence of each federated entity.
§ 1: Tax enforcement actions with a value less than R$ 10,000.00 (ten thousand reais) at the time of filing must be dismissed if there has been no useful movement for more than one year without citation of the defendant, or even if cited, no attachable assets have been located,” states the Brazilian regulation.
Crios Finance (Crios Serviços Digitais e Consultoria em Criptoativos Ltda), which claimed to offer cryptocurrency consulting services, was at the center of the dispute.
Court Sides with Crypto Company, Citing Low Debt Value
The debt owed by Crios Finance to the São Carlos City Hall amounted to R$ 5,632.64 (approximately $1,100 USD). The judge reviewing the case applied the aforementioned legislation to dismiss the lawsuit and conclude the dispute.
Crios Finance presents itself as a quantitative investment fund in the cryptocurrency market, promising to enhance client returns through its investment methods.
Despite these promises, the company’s relatively small debt to the local government suggests potential financial difficulties. Notably, this is the first instance of a cryptocurrency company being legally pursued by the municipality.
A search on the website of the Brazilian Securities and Exchange Commission (CVM) did not reveal any active authorization for Crios Finance to operate cryptocurrency funds.
The company’s website was unavailable, and attempts to reach representatives for comment were unsuccessful. The opportunity remains open for them to provide their perspective.
Judge Criticizes City Hall’s Inefficiency
The judge in the case criticized the São Carlos City Hall for its inefficiency in collecting debts, despite having various means to do so.
“In this case, the plaintiff’s claim of administrative limitations demonstrated by the Notaries (maximum daily capacity of 240 titles to be distributed between the two local registry offices), as well as the need to integrate the system of the Municipality of São Carlos with the Institute of Protests, is not suitable to demonstrate the reason for administrative efficiency. In fact, the public entity is demonstrating its inefficiency in implementing effective ways to collect its credit, in order to comply with Resolution 547 CNJ and even Municipal Law No. 22,380, of April 8, 2024, specifically enacted to create administrative collection mechanisms for tax credits registered as active debt,” the judge stated.
The judge further noted that the municipality filed 11,000 new collection requests in February 2025, hindering the judicial system’s efficiency. While the decision was made in the second instance, the municipality can appeal the ruling.
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