Crypto Regulation Fails but Regulators Press On

Despite the CLARITY Act failing to advance in the Senate by just one vote, crypto industry players remain optimistic about the future of regulation. According to Faustine Fleuret, global head of public affairs at DeFi lending protocol Morpho, the setback is 'real but partial.' She attributes this assessment to recent federal actions that demonstrate regulators are already filling the gap.

Commissioner Hester Peirce's statement on crypto vaults and onchain lending strategies in July 2026, the SEC's Regulation Crypto Assets, an innovation exemption for trading tokenized NMS stocks, and a CFTC staff no-action position covering providers of passive software are cited as examples. Fleuret argues that once firms build on an agency framework, it tends to stay.

Fleuret views Peirce's statement 'less as goodwill than as a reminder' for crypto builders to work out a compliant path instead of assuming they sit outside the regulatory perimeter. She notes two limits: a statement is not a Commission rule, and the SEC cannot go beyond the jurisdiction Congress gave it.

Morpho, which raised $175 million in funding, is making its case directly to regulators for recognition of what makes non-custodial vaults different. Fleuret attributes the funding to the company's infrastructure holding more than $16 billion in deposits and already used by Coinbase, Robinhood, and Société Générale.