CNA Insurance Financial, the seventh-largest commercial insurer in the United States, has made a significant update to Schwab Strategic Trust’s $20 million policy. In a recent filing submitted to the U.S. Securities and Exchange Commission, the insurer introduced an exclusion clause that explicitly denies coverage for nonfungible tokens (NFTs).
Defining NFTs and Implications of the Exclusion
The filing provided a precise definition of NFTs:
“NFTs are defined as any unique digital identifier linked to digital ledger technology, serving to certify the authenticity or ownership of various items, whether they are digital, tangible, or intangible in nature. However, they cannot be substituted or exchanged for similar items.”
With this new addition to the policy, any losses, damages, claims, occurrences, or lawsuits related to NFTs will fall outside the purview of coverage provided by the insurer. It’s essential for policyholders to be aware of this significant change. Notably, the document does make a distinction by clarifying that “cryptocurrency” does not fall within its definition of NFTs.
NFTs: From Hype to Decline and Continued Interests
NFTs garnered significant attention during the bullish market of 2021, attracting both celebrities and businesses. However, in the following years, NFTs experienced a sharp decline in their prices and trading volumes. On August 3, a notable decline in gas usage associated with NFTs hinted at a changing landscape.
Despite the waning enthusiasm for NFTs, some high-profile individuals and enterprises remain committed to the trend. On September 4, soccer superstar Cristiano Ronaldo announced his intention to release more NFTs while undergoing a lie detector test. This test was part of the celebration surrounding the launch of his second NFT collection in collaboration with the crypto exchange Binance.
NFTs Taking Flight
Beyond the world of sports, NFTs have found their way into the aviation industry. On August 31, Lufthansa introduced an NFT app that enables users to scan their boarding passes for the chance to redeem NFTs. These tokens, once collected, can grant passengers access to rewards such as flight upgrades and lounge access.
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