CNA Financial, the seventh-largest commercial insurer in the United States, has excluded coverage for nonfungible tokens (NFTs) from the $20 million policy of Schwab Strategic Trust.
In a filing with the US Securities and Exchange Commission (SEC), CNA stated that the bond does not cover “any loss, injury, claim, occurrence, or suit relating to NFTs. The filing described NFTs as follows:
“Any unique digital identifier connected to any digital ledger technology which may be used to certify 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.”
With the clause affixed to the policy, the insurer will not cover any NFT-related losses. Despite excluding NFTs from the policy, the document clarified that “cryptocurrency” is not included in its definition of NFTs.
NFTs acquired popularity in the bull market in 2021, with various celebrities and companies jumping into the trend. However, a few years later, the prices and trading volume of NFTs declined dramatically. On August 3, the gas consumption of NFTs decreased, signifying a change in the landscape.
Despite the declining popularity of NFTs, some celebrities and businesses continue to invest in them. On September 4, soccer superstar Cristiano Ronaldo stated under a lie detector test that he intends to release more NFTs. A lie detector test was administered to commemorate the introduction of his second NFT collection with the cryptocurrency exchange Binance.
An airline has also recently implemented NFTs into its loyalty program in addition to Ronaldo. On August 31, Lufthansa released an NFT app that allows users to redeem NFTs by scanning their boarding permits. Once accumulated, NFTs can qualify passengers for flight upgrades and lounge access.
