CLARITY Act Fails by One Vote; Fleuret on DeFi Impact

Washington is forging ahead with cryptocurrency regulations, with or without congressional approval, according to Faustine Fleuret, global head of public affairs at DeFi lending protocol Morpho. This perspective emerges after the CLARITY Act narrowly failed to advance in the Senate, falling just one vote short.

Fleuret told Coinpedia that the 49-50 vote outcome has been widely misinterpreted. “The Senate did not vote against regulating crypto; it failed to open the debate,” she stated. Fifty senators declined to invoke cloture on the motion to proceed, primarily because lawmakers had not reached an agreement on ethics rules for elected officials, Fleuret explained.

For companies targeting U.S. users, Fleuret described the legislative setback as “real but partial.” She highlighted several recent federal actions that indicate ongoing regulatory engagement. Fleuret argued that once companies build their operations within an agency’s established framework, that framework tends to endure. “It cannot simply be erased with a stroke of a pen in 2029,” Fleuret commented, though she acknowledged that a future Congress could theoretically alter the course.

She emphasized that only legislation can definitively settle jurisdiction and provide builders with long-term certainty. Fleuret interpreted SEC Commissioner Hester Peirce’s recent statement not as a gesture of goodwill, but rather as a reminder. Depending on their structure, some vaults may already fall under existing securities classifications. Peirce urged builders to proactively seek compliant pathways rather than assuming their operations exist outside the regulatory perimeter.

Fleuret pointed out two limitations to Peirce’s statement. A statement from a commissioner does not carry the weight of a formal Commission rule, and the SEC’s authority is confined to the jurisdiction granted by Congress. Peirce did concede that vaults vary, some may fall outside current regulations, and that rules hindering innovation should be amended.

Traditional finance integrates lending infrastructure with the decision-making process for capital allocation. Vaults, however, separate these two functions, which Fleuret described as making them “a genuine new primitive” that existing rules struggle to accommodate. Morpho is not advocating for an entirely new rulebook, she clarified, but rather for recognition of the distinct nature of non-custodial vaults. The company is directly presenting this case to regulators.

When asked whether Morpho’s $175 million funding round was a result of regulatory clarity or occurred despite its absence, Fleuret attributed the success to the product itself. Investors, she noted, backed infrastructure that holds over $16 billion in deposits and is already utilized by major entities such as Coinbase, Robinhood, and Société Générale. Fleuret added that the funding was secured at a time when the SEC, CFTC, and Treasury are actively engaging with the sector, rather than pursuing litigation.

Approximately 99% of stablecoin value is denominated in U.S. dollars, and the GENIUS Act of July 2025 provided a federal legal foundation for this dominance. While the Markets in Crypto-Assets (MiCA) regulation has encompassed stablecoin issuers since June 2024, Fleuret indicated that a lack of political vision regarding on-chain settlement and payments has hindered the progress of euro-denominated stablecoin issuers. For the upcoming MiCA review, she called for two specific changes.