In a letter to the registrar, ICANN officials laid out their ultimatum after a flurry of complaints from Registerfly customers, who said they lost their domains or were overcharged.
“It's a rare move for us to send a letter that indicates that we will consider terminating the agreement,” ICANN Vice President Paul Levins said.
ICANN also sent Registerfly a separate letter calling for the company to make its data available for inspection and copying.
Under the terms of the registrar accreditation agreement, all registrars must submit their data to ICANN upon written request.
The request for data allows ICANN to preserve the nearly 900,000 domain names registered with Registerfly should the company go under.
One reason for the controversy surrounding Registerfly could be an internal feud between joint owners Kevin Medina, who serves as the company’s CEO, and John Naruszewicz. The two met each other in a Feb 12 lawsuit, when Naruszewicz secured a preliminary injunction preventing Medina from accessing company funds.
Naruszewicz claimed that Medina had used corporate money to pay for a life of luxury — including a $10,000 per month Miami Beach penthouse and a $9,000 escort — at the expense of the company and its customers.
ICANN’s seven-page letter details a number of ways the registrar allegedly breached its contract, as well as customer complaints dating back to 2005.
Chief among customer complaints were charges that Registerfly failed to provide codes users needed when transferring domains to competing registrars. Instead, the domains remained in a “locked” status.
Customers also complained that they were billed three or four times for the same domain.
“Registerfly's pattern of neglect of its obligations to ICANN, fellow registrars and customers demonstrated by the above circumstances is unacceptable,” the ICANN letter said. “Registerfly has repeatedly taken what appears to be a cavalier attitude toward the promises it made.”