CNA Financial, the seventh largest commercial insurance company in the United States, has excluded non-fungible tokens (NFTs) from a $20 million policy with Schwab Strategy Trust.
In a filing with the U.S. Securities and Exchange Commission (SEC), the insurer attached an exclusion clause to the filing, mentioning that the bond does not cover any “loss, damage, claim, event or proceeding related to NFTs.” The filing defines NFTs for:
“Any unique digital identifier associated with any digital ledger technology that may be used to prove the authenticity or ownership of anything, including but not limited to any digital, tangible or intangible item, but cannot be substituted or exchanged for any similar item.”
According to the section attached to the policy, any losses related to NFTs will not be covered by the insurance company. However, while NFTs are excluded from the policy, the document also clarifies that “cryptocurrency” is not included in the definition of NFTs.
NFTs have experienced a resurgence in popularity during the 2021 bull run, with numerous celebrities and companies jumping on the trend. However, a few years later, NFT prices and trading volumes experienced a sharp decline. On August 3, NFT Gas usage dropped, signaling a change in the landscape.
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Although interest in NFTs has declined, some celebrities and companies continue to invest. On September 4, soccer star Cristiano Ronaldo stated that he plans to release more NFTs in the future while taking a polygraph test. The polygraph test was conducted to celebrate the launch of his second NFT series with cryptocurrency exchange Binance.
In addition to Ronaldo, an airline recently implemented NFT in its loyalty program. On August 31, Lufthansa launched an NFT application that allows users to scan boarding passes to redeem NFTs. Once collected, NFTs can qualify passengers for rewards such as flight upgrades or lounge access.
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