ICANN Gets Tough With Registerfly, Locks Domains

Michael Hayes
MARINA DEL REY, Calif. — Concerned over scandal-ridden Registerfly, officials at ICANN said they plan to sue the domain registrar and lock down all of the company’s domains to prevent hijackers and speculators from misappropriating the online properties during the crisis.

Registerfly, which is two weeks into a bitter power struggle between now-CEO John Naruszewicz and ousted former CEO Kevin Medina, came to the attention of ICANN when the agency stepped in and threatened to cancel Registerfly’s accreditation.

The two dueling Registerfly bosses 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.

For nearly a year, Registerfly customers complained that they had been over-billed for their domains and blocked from transferring them.

In a letter to Registerfly last week, ICANN took the unprecedented action of threatening to cancel the registrar’s contract if it could not address customer concerns. As additional insurance, ICANN sent a separate letter demanding that Registerfly makes its data available to ICANN for copying and inspection. That request for data would have allowed ICANN to preserve the estimated 2 million domain names registered with Registerfly should the company go under.

According to a correspondence published by ICANN yesterday, Registerfly refused to turn over the data, prompting ICANN to persuade the major generic top-level domain registries to lock down all Registerfly domains.

VeriSign, NeuStar and Afilias, which run the .com, .net, .biz and .info namespaces, have locked all pending-expiration Registerfly domains into a "Server-Delete-Prohibited" status, at the request of ICANN.

“This will prevent them from being deleted from the registry and becoming available for re-registration by others,” an ICANN spokesman said.

When a domain registration expires, it is almost always re-registered by automated systems run by domain speculators or domain parking firms. If the original domain owners fail to register the domain before expiration, they are often forced to buy it back at a premium.

ICANN said it was taking action, in part, to thwart attempts by domain parking firms and speculators looking to take advantage of the crisis.

ICANN also said it would sue Registerfly as early as Tuesday, charging breach of contract.

An email seeking comment from Registerfly was not returned by post time.