Sex.com Lawsuit Erupts, Kremen ‘Not Involved’

PHILADELPHIA — According to a report in the Philadelphia Inquirer this morning, a group calling itself Sex.com Incorporated that recently tried to buy the domain Sex.com is suing a Boston-based domain registrar for allegedly bilking them out of $500,000 in a deal to buy the famed web address.

The case does not involve Gary Kremen, the well-known entrepreneur who still technically owns the site.

Kremen told XBiz he recently had several individuals, including officials at Boston-based Domain Name Acquisition Group (DNAG) and Deal Jam, put in an option to buy Sex.com, which is estimated to be worth around $11 million. Kremen said they in turn sold the address to an undisclosed buyer, taking a $500,000 deposit on the purchase.

“I had some guys buy an option, kind of like you put a deposit on a house,” Kremen said. “I thought they were going to develop it, but they didn’t. They just tried to resell it.”

Details on the deal are sketchy, and nobody but Kremen was willing to talk about the case, but the attorney for the plaintiff told reporters earlier today that DNAG had failed to disclose valuable information to his client prior to the deposit.

“[DNAG engaged in] repeated untruths regarding the domain name Sex.com, about other competing offers for the domain name Sex.com and various other material and relevant exaggerations and untruths,” he said.

Kremen, who is not named in the lawsuit, said the whole issue has nothing to do with him. The lawsuit names DMAG, Andrew Miller, Peter Hubsham, and Deal Jam as defendants in the case.

“This is entirely a third-party thing,” he said.

Kremen said the individuals at DMAG and Deal Jam who originally optioned to buy Sex.com still have the right to do so, though that option is expiring soon.

“This only shows maybe I didn’t pick a good partner to sell it too,” he said. “If they decide to not exercise their option, then it’s still for sale.”

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