Legal Troubles for Musk's Department of Efficiency Spark Dogecoin Price Drop

January 21, 2025 05:01 PM AEDT | By Team Kalkine Media

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Legal Troubles for Musk's Department of Efficiency Spark Dogecoin Price Drop — Image source: Shutterstock

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Highlights

Three lawsuits filed against Elon Musk's Department of Government Efficiency (DOGE).

Allegations of breaching federal transparency regulations spark debate.

Dogecoin (DOGE-USD) sees a 7% dip amid legal disputes and market concerns.

Dogecoin (DOGE-USD), the popular dog-themed cryptocurrency, saw its value drop nearly 7% following the filing of three lawsuits against the Elon Musk-led Department of Government Efficiency (DOGE). The legal actions coincided with Donald Trump’s inauguration and focused on alleged violations of federal transparency laws.

The lawsuits argue that DOGE qualifies as a federal advisory committee (FACA) and should therefore adhere to stringent transparency, hiring, and disclosure requirements. So far, the department is accused of falling short of these standards.

The lawsuits come from various groups, including:

Public Citizen, the State Democracy Defenders Fund, and the American Federation of Government Employees.
National Security Counselors, a public interest law firm.
Democracy Forward and Citizens for Responsibility and Ethics.

However, an anticipated executive order by Trump could complicate the cases. This order could redefine DOGE’s role as a government body, potentially exempting it from the regulations cited in the lawsuits.

Legal experts have differing views on the issue. Kel McClanahan, executive director at National Security Counselors, argues that DOGE must comply with FACA’s transparency requirements. According to McClanahan, if Trump changes DOGE's status to a government entity, it could nullify the lawsuits but impose stricter ethical obligations on Elon Musk and his team.

In contrast, Sam Hammond, senior economist at the Foundation for American Innovation, claims that DOGE does not exist as an official federal advisory committee. Instead, he suggests it operates as a branding tool for Trump’s reform initiatives, making it exempt from these transparency rules.

On the same day, Musk drew attention during Trump’s inauguration and subsequent events, raising eyebrows with unusual behavior, including a controversial salute.

Meanwhile, Dogecoin's value experienced a significant drop. According to CoinGecko, the cryptocurrency was trading at $0.358, down from its 24-hour high of $0.384. This legal uncertainty, combined with market reaction to Musk’s public appearances, seems to have contributed to the decline.

As the lawsuits progress, the implications for DOGE’s operation and Dogecoin’s value remain uncertain. Investors and stakeholders are keeping a close watch on both the legal outcomes and Musk’s next moves.

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