The US government seized five domain names and is going after dozens more as part of its crackdown on Liberty Reserve, a digital currency provider apparently popular with criminals.
The Department of Justice said yesterday that the company was responsible for laundering $6 billion spread across 55 million transactions, “virtually all of which were illegal”.
The service was being used to facilitate fraud and child pornography, among other nasties, according to Justice.
Seven people have been arrested in the US, Spain and Costa Rica and five domain names were seized: libertyreserve.com, exchangezone.com, swiftexchanger.com, moneycentralmarket.com and asianagold.com.
Three are registered with Go Daddy. The main site, libertyreserve.com, is with Swedish registrar AB NameISP and exchangezone.com is with Internet.bs.
But .com registry Verisign handled the seizures, according to a court order published by Justice (pdf).
While Liberty Reserve was based in Costa Rica, there doesn’t appear to be any reason to believe the company’s activities were any more legal there than in the US.
Justice is also seeking the forfeiture of 35 other domain names, mostly .coms, that were allegedly (pdf) being used as “exchanger” sites, where Liberty Reserve users could exchange real money for virtual currency.
Law enforcement agencies in the US and Europe have shut down 132 domain names in order to stop the selling of counterfeit merchandise online.
According to the US Immigration and Customs Enforcement agency, the now-annual Cyber Monday crackdown included domain names in the .eu, .be, .dk, .fr, .ro and .uk ccTLDs.
Law enforcement from those countries were involved, via Europol, in their respective local seizures, while ICE nabbed 101 domains in generic TLDs whose registries are based in the US.
One person was also arrested, and ICE plans to seize $175,000 in ill-gotten gains sent to a PayPal account connected with the sites.
It’s the third year in a row that ICE has led an operation of this kind before “Cyber Monday”, which in recent years has become the most popular day of the year for e-commerce deals.
The operation started when ICE and Europol “received leads from various trademark holders regarding the infringing websites”, ICE said in a press release.
Three US members of Congress have expressed “deep concern” over the alleged lack of due process followed when the Department of Homeland Security seizes domain names.
Rep. Zoe Lofgren, Rep. Jared Polis and Rep. Jason Chaffetz quiz DHS (pdf) about the methods employed by the Immigration and Customs Enforcement agency in its Operation In Our Sites.
The Congressmen’s letter highlights the case of the hip-hop web site Dajaz1.com, which had its .com seized by ICE and then returned.
“Much of Dajaz1′s information was lawful,” the letter reads. “Despite this, DHS and the Department of Justice suppressed this website for more than a year.”
The Congressmen say that “if a website’s domain is seized, it needs to be given meaningful due process that comports to the US Constitution and US law”.
Operation In Our Sites has seen ICE seize hundreds of domains — mainly .coms accused of copyright infringement — from US-based registries including Verisign since late 2010.
Despite the relatively small number of domains seized, there have been a number of controversies.
Notably, the Spanish TV download web site RojaDirecta, which lost its .com and .org domains despite being ruled legal by a court in its home nation, last month had them returned to it by ICE.
The FBI and UK Serious Organised Crime Agency have seized 36 domain names that were allegedly being used to sell compromised credit card information.
As well as seizing the domains and a number of computers, SOCA said it has arrested two men “suspected of making large scale purchases of compromised data” from the sites.
The sites all used what SOCA calls “automated vending cart” software to process the sale of credit card information. Judging by the video below, some of the operations were fairly professional.
One of the seized domains was cvvplaza.com. SOCA provided the following video which really has to be seen to be believed.
I wonder if the spokesmodel had any idea what she was getting into when she accepted this gig.
While the full list of domains was not released, a SOCA spokesperson said the breakdown by TLD was as follows:
.name – 2
.net – 11
.biz – 4
.us – 5
.com – 11
.org – 3
These are all TLDs whose registries are based in the United States, so I’m guessing the US authorities did the actual seizing.
ICM Registry has suspended several dozen .xxx domain names registered by cybersquatters.
It’s believed to be unprecedented for a mainstream registry to unilaterally shut down domains purely on the grounds of alleged cybersquatting, as I reported for The Register earlier today.
ICM took down 70 to 80 domains including washingtonpost.xxx, cnbc.xxx and verizonwireless.xxx because it decided that the domains infringed trademarks and were therefore abusive.
Many belonged to the squatter Domain Name Wire first fingered as the registrant of huffingtonpost.xxx, named in Whois as Justin Crews.
Crews had told MSNBC that he planned to sell the domains at profit.
There was no UDRP arbitration, no court order, just a breach of the .xxx registry-registrant agreement, which gives ICM the right to suspend squatted domains at will.
This is the relevant part of the agreement, which all .xxx registrants must agree to:
You acknowledge and agree that the Registry reserves the right to disqualify you or your agents from making or maintaining any Registrations or Reservations in the .XXX TLD if you are found to have repeatedly engaged in abusive registrations, in its sole discretion.
I blogged back in May about why it might not be necessary to spend a fortune on defensive registrations in .xxx, given the existence of this policy and others.
Nevertheless, while it may take a while for the implications to become clear, I think the suspensions represent a very significant development.
Coming so soon after the end of ICM’s sunrise period, which saw many organizations spend thousands on useless non-resolving defensive registrations, I wouldn’t be surprised if many companies feel like they may have wasted their money.
If you’ve just spent $200 defending your brand, I imagine it would be quite annoying to see the likes of verizonwireless.xxx or businessweek.xxx get the same protection for free.
I would also not be surprised if, from now on, trademark attorneys trying to defend their rights in .xxx first contacted ICM, rather than WIPO or the National Arbitration Forum.
Why spend thousands on a UDRP complaint when you can just send a legal nastygram to ICM?
ICM president Stuart Lawley told DI today that this wave of suspensions was done independently, not in response to any legal demands.
Still, the precedent has been set: ICM will suspend domains for free, under certain circumstances.
What those circumstances are is less clear.
Lawley said that ICM will not get involved in complaints about individual domains – but it will shut down cybersquatters with multiple infringements.
But what constitutes cybersquatting? UDRP has a definition, but I’m not sure ICM does. It may be quite subjective.
It’s also not clear what ICM will do with the suspended domains, not all of which necessarily infringe trademarks. Some may be bona fide, but the ICM policy is to take down the registrant’s entire portfolio.
So will those non-infringing domains be released back into the pool? And if so, how will ICM determine which are squats and which are not?
And what about the ones that are squats? Will they be released?
AOL may be content for huffingtonpost.xxx to remain suspended forever. As long as it’s suspended, the company does not have to worry about defensive registration fees.
But consider gayroom.xxx, which was also suspended.
The owner of gayroom.com owns a trademark on the word “gayroom”. Gayroom.com is a porn site, but one that has chosen not to buy its equivalent .xxx domain.
What if it changes its mind? If gayroom.com wants gayroom.xxx in future, is there a way to take it out of suspension, or is the company stuck without its .xxx forever, just because a cybersquatter got there first?
ICM’s policies do not seem to answer this question and the company has not yet revealed its plans for the suspended domains.
As a post-script, I should note that Huffington Post owner AOL is currently listed as the registrant of huffingtonpost.xxx in the Whois record.
It’s not yet clear why this is the case, but Lawley stated unequivocally today that the apparent transfer is completely unrelated to ICM’s own crackdown.
Did the cybersquatter transfer the domain to AOL before the suspension? Did he sell it to AOL? Or did he just update the Whois with phoney data? Either seems possible at this point.