Broker says it will sue after DNS abuse sting operation

The CEO of domain broker VPN.com is threatening to sue an online safety advocacy group after a report was published alleging the company trades in names that could be used for illegal activity.

Michael Gargiulo said he will take action against the Digital Citizens Alliance unless it removes a report that claimed one of the company’s brokers agreed to coordinate the $21,000 purchase of covidvaccinecardsforsale.com, even after being told it would be used for illegal purposes.

“[We] sadly have no choice but to sue the Digital Citizens Alliance, Executive Director Tom Galvin, their Managing Editor, and every John Doe that coordinated this fraud unless this content is removed within 48 hours from now,” Gargiulo said.

The DCA report, entitled “Peddling For Profit — How Website Retailers Enable Bad Actors to Become the Master of Illicit Domains” (pdf), is largely an attempt to highlight how domain registrars don’t vet domains for potentially illegal use before allowing them to be registered.

It’s mostly familiar nonsense, apparently written with a general audience and tabloid headlines, rather than the domain industry or tech industry, in mind.

There’s no attempt to explore the complexities of automatically determining a registrant’s intent at the point of sale and comparing it to the world’s hundreds of legal jurisdictions, it’s mainly just “Woah, GoDaddy let me register untraceablegunsforsale.com!”

Where the report differs from the norm is when it looks at the secondary market, where human beings work with buyer and seller to agree a price and transfer a domain.

With VPN, the DCA reporter posed as the potential buyer of covidvaccinecardsforsale.net and carried out an email conversation with a broker in which it was stated the domain would be used to sell “Covid cards” to “the unvaccinated”, from which one could certainly infer a nefarious purpose.

The VPN broker responded by trying to negotiate the sale of the matching .com for a higher price, the DCA report states. Later, the DCA reporter says he wants to “stay under the radar of the FTC” but VPN’s response, if any, is not reported.

Gargiulo told DI that DCA “posed as a legitimate Buyer on the original inquiry with fraudulent intent, which by their publication admission, is fraudulent and illegal in America.”

The broker in question is from outside the US and “did not understand their [DCA’s] illegal intent” he said.

“In many parts of the world including Europe, Covid cards are used for vaccinated and unvaccinated people,” he said, giving the Netherlands as an example.

“We take this matter very seriously as the characterization of our company is absolutely ridiculous in this document,” he said. “There was little-to-no journalistic integrity to verify the other side of this story by DCA and the transaction never even got remotely close to occurring.”

DCA also attempted to buy buystolencreditcards.com via broker Domain Agents, but after blatantly describing how the name would be used for crime, “the broker canceled the deal.”

DCA, as its name implies, is funded by undisclosed companies in Big Content, Big Pharma, internet security and consumer safety. It’s led by former Verisign PR man Tom Galvin.

“We will let the report speak for itself,” a DCA spokesperson said when asked for comment on the legal threat.

.club financing option sees early traction with $150k sales

.CLUB Domains said it has seen some early successes with its new 0% financing option, selling $150,000 worth of premium .club domains in its first week.
The registry announced that it sold 39 premiums for a total of $149,480, and that 37 of those names were sold using the financing option.
This option allows registrants to spread the cost of their domains over five years — 60 monthly payments — for names priced over $1,000.
The scheme was announced at the NamesCon conference in conjunction with a new brokers program, which gives brokers the ability to pass on 10% discounts to their clients and earn 15% commissions.
Seventeen of the 39 names were sold via brokers.
The results of the the first seven days of these programs compare favorably to other periods. In the fourth quarter of 2016, .CLUB said premium sales were $112,000.
For the whole of 2016, the registry sold $941,000 of reserved premium names, making a total of $4.3 million since .club launched May 2014.

RightSide cuts super-premium fees in half, drops premium renewals

New gTLD registry RightSide has slashed the minimum price of its so-called “Platinum” tier premium domains and dropped renewal fees for these domains down to an affordable level.
The price changes come as part of two new marketing initiatives designed to start shifting more of its 14,000-strong portfolio of super-premiums through brokers and registrar partners.
The minimum first-year price of a Platinum-tier name has been reduced immediately from $50,000 to $25,000.
In addition, these domains will no longer renew every year at the same price. Instead, RightSide has reduced renewals to a more affordable $30.
“We weren’t selling them,” RightSide senior VP of sales and premiums Matt Overman told DI. “There is not a market for $50,000-a-year domain purchases.”
Now, “we feel comfortable enough with amount money we’re going to make up-front”, Overman said.
However, premium renewals are not being abandoned entirely; non-Platinum premium names will still have their original higher annual renewal fees, he said.
RightSide has sold some Platinum names in the five and six-figure range, but the number is quite small compared to overall size of the portfolio.
But Overman said that “none of them sold with a $50,000 renewal”. The highest renewal fee negotiated to date was $5,000, he said.
Before yesterday’s announcements, RightSide’s Platinum names were available on third-party registrars with buy-it-now fees that automatically applied the premium renewal fees.
However, it seems that the vast majority if not all of these sales came via the company’s in-house registrars such as Name.com and eNom, where there was a more flexible “make an offer” button.
Under a new Platinum Edge product, RightSide hopes to bring this functionality to its registrar partners.
It has made all 14,000 affected names registry-reserved as a result, Overman said. They were previously available in the general pool of unclaimed names and available to registrars via EPP.
Each affected name now has a minimum “access fee” of $25,000 (going up to $200,000 depending on name) that registrars must pay to release it.
They’re able to either negotiate a sale with a markup they can keep, or sell at “cost” (that is, the access fee) and claim a 10% commission, Overman said.
A separate Platinum Brokerage service has also been introduced, aimed at getting more professional domain brokers involved in the sales channel.
Brokers will be able to “reserve” up to five RightSide Platinum names for a broker-exclusivity period of 60 days, during which they’re expected to try to negotiate deals with potential buyers.
While no other brokers will be able to sell those names during those 60 days, registrars will still be able to sell those reserved names.
Overman said that if a registrar sells a name during the period it is under exclusivity with a participating broker, that broker will still get a commission from RightSide regardless of whether they were involved in the sale.
“We won’t give that name to any other broker, but if it sells through a registrar they still get their 10%,” he said. The registrar also gets its 10%.
This of course is open to gaming — brokers could reserve names and just twiddle their thumbs for 60 days, hoping to get a commission for no work — but the broker program is expected to be fairly tightly managed and those exploiting the system could be kicked out.
RightSide will be making the case for the two Platinum-branded offerings at the upcoming NamesCon conference in Las Vegas, where it also expects to name its first brokerage partners.