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Controversial Chinese firm among two newly revealed UNR gTLD buyers

Two more former UNR top-level domains have formally changed hands following the company’s fire sale over a year ago.

The ICANN contracts governing .llp and .help have been reassigned, the former to Intercap Registry and the latter to a new-to-the-industry Seychelles-based company called Innovation service Ltd, ICANN records show.

Intercap is a relatively known quantity, already running the .inc, .dealer and .box gTLDs.

Innovation is an entirely different kettle of fish.

The company appears to be led by a Hong Kong entrepreneur named Heng Lu, best known for making millions obtaining IPv4 addresses from Afrinic, the African Regional Internet Registry, and leasing them to clients in China for a huge profit.

Heng Lu is also the founder of Cloud Innovation Ltd, another Seychelles shell. It is currently embroiled in a string of lawsuits with Afrinic, which last year tried to revoke Cloud’s membership and therefore its IPv4 space.

The case(s) of Cloud versus Afrinic are pretty convoluted and a bit off-beat for this blog, but at one point last year it led to Afrinic’s bank accounts being frozen by the Mauritius Supreme Court, putting IP address management across the whole continent at risk.

ICANN would certainly have been aware of this already when it approved the transfer of the .help gTLD to what appears to be a related company. After the Mauritius injunction, Afrinic pleaded with ICANN for financial help, which ICANN provided.

The two transfers mean we now know the identities of the buyers of 17 of the 23 gTLD contracts UNR put up for sale in April 2021. ICANN took a long time to approve the reassignments due to worries about IP rights.

.link gTLD buyer revealed

Another of UNR’s portfolio auction winners has emerged.

This time it’s .link, UNR’s low-cost volume play, and the buyer appears to be a veteran domain investor named Yonatan Belousov.

ICANN records for .link were updated today to name a Maltese company called Nova Registry, an individual named Emanuel Debono, and an email address at nova.link as contacts.

It’s not a great sign when you google a company or person and all the top hits are from the Panama Papers leaks, but of course not every use of offshore companies is shady and ICANN will have done its due diligence.

Digging deeper into the rabbit hole, corporate records show Nova is owned by another Maltese company called Vanderlay Investments, which in turn has Belousov, known in the domaining industry as Yoni and a regular guest on Domain Sherpa, as the sole owner.

The domain nova.link doesn’t resolve to a web site, but it is registered to another Maltese company called Indefinite, which has a nice collection of one-word .com domains for sale.

The new information means we now know the identities of the buyers of 15 of the 23 gTLD contracts UNR put up for sale in April 2021. XYZ, GoDaddy, Top Level Design and Dot Hip Hop all walked away with shiny pre-loved TLDs.

Dot Hip Hop slashes prices 80% in relaunch

The industry newcomer run mainly by veterans, Dot Hip Hop said today it will slash the price of .hiphop domains by 80% in an effort to reinvigorate the languishing gTLD.

That appears to mean a wholesale fee reduction from $100 to $20 a year.

The price cut will be married with a focus on registry-level marketing that the TLD didn’t really get as part of the old UNR portfolio. Chief marketing officer Scott Pruitt said in a press release:

Domain registries that have invested in marketing directly to end-users have been the most successful in the last few years, This simple strategy of end-user outreach and lower prices combined with the enormous growth of hip-hop as a worldwide cultural and economic force, make us extremely optimistic about the future of our company.

Dot Hip Hop is a partnership of startup DigitalAMN and industry stalwarts Monte Cahn, Jeff Neuman and Pruitt.

The company acquired the .hiphop ICANN contract from UNR a year ago, in a deal that took until this January to close due to ICANN delays.

.hiphop currently has fewer than 1,000 domains under management, no doubt mostly due to the formerly high prices.

The wholesale fee cut seems to be translating to retail prices around $25 at the low end, competitive with most gTLDs.

GoDaddy and XYZ sign away rights after UNR’s crypto gambit

Kevin Murphy, April 19, 2022, Domain Registries

ICANN has started asking registries to formally sign away ownership rights to their gTLDs when they acquire them from other registries.

GoDaddy and XYZ.com both had to agree that they don’t “own” their newly acquired strings before ICANN would agree to transfer them from portfolio UNR, which auctioned off its 23 gTLD contracts a year ago.

GoDaddy bought .photo and .blackfriday for undisclosed sums in the auction, it emerged last week. XYZ bought 10 others and newcomer Dot Hip Hop bought .hiphop.

All three transfers were signed off March 10 (though GoDaddy’s were inexplicably not published by ICANN until last Thursday, when much of Christendom was winding down for a long weekend) and all three contain this new language:

The Parties hereby acknowledge that, notwithstanding anything to the contrary in any marketing or auction materials, documentation or communications issued by Assignor or any other agreements between the Parties or otherwise, nothing in the Registry Agreement(s) or in any other agreements between Assignor and Assignee have established or granted to Assignor any property or ownership rights or interest in or to the TLDs or the letters, words, symbols or other characters making up the TLDs’ strings and that Assignee is not being granted any property or ownership rights or interest in or to the TLDs or the letters, words, symbols or other characters making up the TLDs’ strings.

The Parties represent that they understand the scope of ICANN’s Consent, which: (A) does not grant Assignee any actual or purported property or ownership rights or interest in or two the TLDs or the letters, words, symbols or other characters making up the TLDs’s strings; (B) is solely binding and applicable to the assignment of rights and obligations pursuant to the Registry Agreement(s); (C) solely relates to the operation of the TLDs in the Domain Name System as specified in the applicable Registry Agreement(s); and (D) does not convey any rights to the letters, words or symbols making up the TLD string for use outside the Domain Name System.

The TL;DR of this? Registries don’t “own” their gTLDs, ICANN just allows them to use the strings.

The new language is in there because UNR’s auction had offered, as a bonus, ownership of matching non-fungible token “domains” on the blockchain-based alt-root Ethereum Name Service.

Alt-roots arguably present an existential threat to ICANN and a risk to the interoperability of the internet, so ICANN delayed authorization of its approvals for many months while it tried to figure out the legalities.

Dot Hip Hop, for one, has said it couldn’t care less about the Ethereum NFT, and has had it deleted.

Separately, the .ruhr contract has been transferred from regiodot to fellow German geo-TLD operator DotSaarland, a subsidiary of London-based CentralNic, which announced the acquisition in February.

This assignment agreement was signed March 31 — after GoDaddy’s and XYZ’s — and does not include the new ownership waiver language, suggesting that it’s unique to UNR’s auction winners.

However, the friction between blockchain alt-roots is likely to be an issue when the next new gTLD application round opens.

It’s being said that a great many “TLDs” are being registered on various blockchains specifically in order to interfere with matching ICANN applications, and that blockchain fans are attempting to delay the next round to give their own projects more time to take root.

GoDaddy’s two acquisitions bring the total known outcomes of UNR’s auctions to 13 out of 23 gTLDs. At least four more are being processed by ICANN, according to a now month-old statement.

With mystery auction winner, .sexy prices go from $25 to $2,500

Kevin Murphy, March 28, 2022, Domain Registries

UNR is increasing the annual price of a .sexy domain from $25 to over $2,000, according to registrars.

The price increase will hit from April 30, according to registrars, but will not affect renewals on domains registered before that date.

French registrar Gandi said its retail price for a .sexy name will increase from $40 to $2,750. That’s after its mark-up. Belgian registrar Bnamed said in January prices were about to get 100 times more expensive.

The current wholesale price for .sexy is believed to be $25 a year. I’m guessing it’s going up to about $2,500, which is a price tag UNR has previously experimented with for its car-related gTLDs.

UNR CEO Frank Schilling has previously defended steep price increases for TLDs that under-perform volume-wise.

.sexy had barely 6,000 names under management at the last count, having peaked at about 28,000 in 2017.

The question is: who’s decided to increase the prices? Did .sexy actually sell when UNR tried to offload its portfolio last year, or is UNR keeping hold of it?

.sexy was among the 23 gTLD contracts UNR said it sold, mostly at auction, about a year ago. But it’s not one of the ones where the buyer has been yet disclosed.

The gTLDs UNR said it sold were: .audio, .blackfriday, .christmas, .click, .country, .diet, .flowers, .game, ,guitars, .help, .hiphop, .hiv, .hosting, .juegos, .link, .llp, .lol, .mom, .photo, .pics, .property, .sexy and .tattoo.

Of those, a new company called Dot Hip Hop bought .hiphop and XYZ.com bought .audio, .christmas, .diet, .flowers, .game, .guitars, .hosting, .lol, .mom and .pics.

ICANN has approved those 11 contract reassignments — after some difficulty — and said that there are six remaining in the approval process.

That only adds up to 17, meaning there are six more that UNR said it sold but for which it had not, as of a week ago, requested a contract transfer.

But in May last year, UNR “announced gross receipts of more than $40 million USD for its 20+ TLDs”, said there had be 17 participating bidders, and that 10 to 20 had “came away as winners, including six who will be operating TLDs for the first time”.

That leaves with at least five as-yet undisclosed winners from outside the industry, six contract transfers outstanding, and six gTLDs with an unknown status.

Neither UNR nor ICANN have been commenting on the status of pending transfers.

XYZ bought most of Uniregistry’s TLDs

Kevin Murphy, March 21, 2022, Domain Registries

XYZ.com has emerged as the winning bidder for 10 of the 17 new gTLDs that UNR, formerly Uniregistry, auctioned off last year.

The company bought .audio, .christmas, .diet, .flowers, .game, .guitars, .hosting, .lol, .mom and .pics, according to ICANN, which approved the transfer of each registry agreement today.

As previously reported, a new company called Dot Hip Hop bought .hiphop, albeit not at auction.

The contract reassignments come almost a year after the auction took place, and were delayed after ICANN got nervous about the fact that UNR had apparently sold matching Ethereum Name Service blockchain domains at the same time.

“This raised concerns because ICANN org was being asked to approve transactions that included not only the transfer of gTLD operations set out in the relevant registry agreements, but also included references and/or implications of the transfer of ownership rights in the gTLDs,” ICANN veep Russ Weinstein wrote today.

“To be clear, the registry agreements do not grant any property ownership rights in the gTLD or the letters, words, symbols, or other characters making up the gTLD string,” he added.

Six more UNR gTLD contracts remain in the approval process, but ICANN blamed this on the timing of when the assignment requests were submitted.

The UNR auction last April raised over $40 million, according to UNR.

Post-lockdown blues hit Tucows’ growth

Kevin Murphy, February 11, 2022, Domain Registrars

Tucows’ domain business was pretty much flat in the fourth quarter and full-year 2021, as the company hit the trough following the spike of the pandemic lockdown bump.

The registrar said last night that its Domain Services business saw new registrations down or flat in both wholesale and retail channels, even when compared to pre-pandemic levels.

The company said (pdf) it ended the year with 25.2 million domains under management, down from 25.4 million a year earlier. The total number of new, renewed or transferred-in domains was 17.4 million, down from 18.2 million.

For the fourth quarter, the total new, renewed or transferred-in domains was 4 million, compared to 4.3 million a year earlier.

In prepared remarks (pdf), CEO Elliot Noss said that wholesale-segment registrations were down 6% to 3.7 million in Q4 and new registrations were down 27% from 2020’s pandemic-related “outsized volumes”.

In retail, total new, renewed and transferred registrations for the quarter were just over 310,000, down 16%, he said. New registrations were down 21% year over year.

The domains business reported revenue of $61.4 million in the fourth quarter, down from $61.8 million in the year-earlier period.

Domain revenue from wholesale was down to $47.1 million from $47.5 million. Retail was down to $8.7 million from $9.2 million. EBITDA across both channels was $11.6 million, down from $12.1 million.

The renewal rates for wholesale and retail were a more-than-respectable 80% and 85% respectively.

Some of the declines can be attributed to the pandemic-related bump Tucows and other registrars experienced in 2020.

Margins had been impacted a bit by the acquisition of UNR’s back-end registry business, the integration of which Noss said has now been fully completed.

For the full company, including non-domain businesses such as mobile and fiber, revenue for the year was down 2.2% at $304.3 million and net income was down 41.7% at $3.4 million.

The company also announced it has renewed its $40 million share buyback program.

Monte Cahn revealed as third new gTLD buyer

Kevin Murphy, January 11, 2022, Domain Registries

Domain investor Monte Cahn has revealed himself as the third partner in the controversial acquisition of new gTLD .hiphop from UNR.

Cahn Enterprises named itself alongside already-reported consultant Jeff Neuman of JJN Solutions and publicly traded startup Digital Asset Monetary Network (DigitalAMN) as a partner in newly formed registry vehicle Dot Hip Hop LLC.

DHH bought .hiphop privately from Frank Schilling’s UNR last April at around the same time as UNR auctioned off the other 22 gTLDs in its portfolio, exiting the registry business.

Cahn founded the registrar Moniker, aftermarket pioneer SnapNames and gTLD auction coordinator RightOfTheDot.

RightOfTheDot’s Scott Pruitt has also joined DHH to lead marketing, Cahn’s press release revealed.

The new registry plans to lower the price of .hiphip domains, which currently retail for over $150 a year, as part of an effort to get broader adoption in the hip-hop cultural community.

The company is strongly pushing digital empowerment and “financial literacy” in an “underserved” community as a public benefit of its plans for the TLD.

The problem DHH continues to face is ICANN’s ongoing blocking of the transfer of .hiphop, and the other 22 UNR TLD contracts, due to confusion about the ownership status of matching TLDs on the Ethereum Name Service, a blockchain-based alt-root.

ICANN is fearful of alternative DNS roots which, if they ever gain broad appeal, in theory could break internet interoperability as well as eroding ICANN’s own uniquely powerful and uniquely lucrative authority over the DNS.

DHH’s Neuman recently accused ICANN of foot-dragging and retaliation over the delayed transfers, which is costing the DHH partners money while their legal status is in limbo and they are unable to sell any names.

ICANN’s top brass subsequently denied these accusations, saying the Org is merely following its established (and rather convoluted) appeals procedures.

While these procedures could delay approval of .hiphop’s transfer for another few months, forcing DHH to burn more capital, ICANN said it is “considering the potential impact on the requestor as we have been requested to do”, so it may cut DHH some slack.

ICANN is blocking 23 gTLD transfers over blockchain fears

ICANN is objecting to the transfer of 23 new gTLDs from UNR to an unknown number of third parties, because it’s scared that the associated non-fungible tokens may break the internet and its own authority over it.

The mystery of how UNR’s auction in April of its entire new gTLD portfolio has so far not resulted in a single ICANN Registry Agreement changing hands appears to have been solved.

It’s because UNR bundled each contract sale with a matching top-level “domain name”, in the form of an NFT, on the Ethereum Name Service, an alt-root based on the Ethereum blockchain, and ICANN is worried about what this means for both the long-term interoperability of the DNS and its own ability to act as the internet’s TLD gatekeeper.

This all emerged in an emergency Request for Reconsideration filed by a company called Dot Hip Hop, which bought .hiphop from UNR earlier in the year.

It turns out .hiphop is the TLD alluded to by Digital Asset Monetary Network, which in October became the first to out itself as a UNR buyer while not naming its gTLD. The purchase was made separately from the April auction, despite .hiphop being “mistakenly” listed as one of the lots.

It also turns out that consultant Jeff Neuman, who’s been a leading figure in the ICANN community since its inception, was behind long-time employer Neustar’s application for .biz, and is a big fan of musical theater, is chief legal officer of and a partner in DHH.

In his reconsideration request, Neuman rages against the fact that it had been over 120 days at time of writing since DHH and UNR had applied to have the .hiphop contract reassigned, but that ICANN is continuing to drag its feet despite DHH long ago passing its due diligence review (which Neuman says cost an excessive $17,000).

DigitalAMN lists DHH as a subsidiary in its recent Securities and Exchange Commission filings. The company is publicly listed but essentially pre-revenue, making its ability to start selling domain names rather quickly rather important.

ICANN has repeatedly delayed approval of the reassignment, provided no visibility into when approval will come, and has repeatedly asked the same questions — largely related to the NFTs — with only slight rewording, Neuman says:

ICANN Org has already communicated to DHH that it has already met all of the criteria required under the Registry Agreement. Yet still, ICANN is withholding consent based on its mere curiosity about the former owner of the .hiphop, TLD (UNR Co), and based on the questions that ICANN keeps re-asking, has presumably conjured up non-issues that: (a) have already been addressed by DHH on multiple occasions over the past 123 days, (b) are beyond the scope of ICANN’s mission, and (c) are philosophical, fictional and frankly do not exist in this matter.

The ENS NFT is a “de minimus” component of the transaction that DHH didn’t even know about until after it had already decided to buy .hiphop, the request states, and ICANN has no authority over the blockchain so the existence of an NFT is not a valid reason to deny the reassignment.

I think I also detect a race card being played here. The RfR spends a bit of time talking about how ICANN’s foot-dragging is making the Org look bad to “traditionally underserved communities where the Hip Hop culture has thrived, globally”.

Apparently referring to DigitalAMN, the RfR states:

In addition to such partner being established at the birthplace of Hip Hop (Bronx New York), by its founder who shares the same birthdate as Hip Hop (August 11th), its mission is to provide financial literacy and economic opportunities for those communities and cultures that are traditionally under-represented, under-funded and under-valued.

DigitalAMN is majority-owned and led by Ajene Watson, who is black. One of company’s stated goals is to connect early stage companies with capital from non-traditional investors (not just the “privileged few”) using non-traditional means.

The RfR goes on to say:

The most dominantly underserved, under-funded and under-valued communities, are also those that embrace and are part of the Hip Hop culture. This Partner has embraced what seemed to be an opportunity to provide domain name registration services to a culture that knows nothing of ICANN, nor the domain name industry. Now, its first impression of the ICANN community is unnecessary delay, a lack of transparency, and bureaucratic indecision—just another gatekeeper to prevent equitable access. In their eyes, they consistently see deadlines that are never met (by ICANN), a lack of information as to why their launch is being held up, and an entity (ICANN) that takes weeks/months to act on anything with no end in sight. In their view, it would appear that ICANN, as an organization, cares nothing about serving the public interest, or about the impact of its actions (or in this case inactions) on the undervalued communities this Partner aims to support.

It should be noted that 22 other unrelated UNR gTLD reassignments are also in limbo, so it’s not like ICANN has a problem in particular with hip-hop music or those who enjoy it.

ICANN, in its response to the RfR, lays all the blame with UNR for, it says, refusing to provide “fulsome and complete” answers to its questions about the NFTs. In a December 10 letter to Neuman, ICANN VP Russ Weinstein wrote:

Significant questions remain, including regarding the role and rights conveyed to the proposed assignees related to the NFTs created on the ENS. For these reasons, ICANN must continue to object to and withhold its consent to all pending Assignments proposed by UNR, including yours.

The RfR was denied by ICANN’s Board Accountability Mechanisms Committee on a technicality. DHH had filed an “emergency” request based on ICANN’s staff inaction, but emergency requests only apply to board action or inaction.

Neuman appears to have known this in advance. It appears DHH just wanted to get something in the public record about the state of play with UNR’s gTLDs.

ICANN seems to have two problems with the NFTs, and they’re both big, existential ones.

First, ENS is essentially an alt-root, and when you have competing roots there’s the risk of TLDs colliding — two or more registries claiming authority for the same TLD — breaking the global interoperability of the internet.

Second, but related, the existence of alt-roots threatens ICANN’s authority.

ICANN has no authority over ENS or the NFT names that live on it, so for a registry to run a TLD in the both the authoritative ICANN root and the alt-root of the ENS could cause problems down the road.

While NFTs can be “owned”, gTLDs are not. UNR is merely the party ICANN has contracted with to run .hiphop. While UNR and any subsequent assignees have a presumptive right of renewal, it’s possible for ICANN to terminate the contract and hand stewardship of the gTLD to another registry. It’s not merely a hypothetical scenario.

Should that ever happen with .hiphop, ICANN wouldn’t have the authority to seize the ENS NFT, meaning the old registry could carry on running .hiphop in the ENS while the new registry runs it in the ICANN root, again breaking global DNS interoperability.

You could spin it either way — either ICANN is worried about interoperability, or it’s worried about protecting its own power. These are not mutually exclusive, and are both probably true.

One thing’s the sure, however — in roadblocking these gTLD transfers, ICANN is playing into the hands of critics and blockchain fanboys who argue for decentralized control of naming, with ICANN as their bogeyman.

First UNR gTLD buyer outs itself

Kevin Murphy, October 28, 2021, Domain Registries

A company from outside the domain industry with no revenue last year and doubts about its survival has announced itself as the buyer of one of UNR’s gTLDs, which were sold off earlier this year.

Digital Asset Monetary Network Inc issued a press release stating that it has “acquired a TLD”. It didn’t name the TLD, or the seller, but gave enough information for us to narrow it down to UNR:

The gTLD acquired by DigitalAMN was originally slated to be part of an auction recently conducted by a large retail registry and was mistakenly listed with the registry’s available inventory for auction. However, the Company and its domain industry partners were able to secure this digital asset completely outside of that auction.

UNR had listed these 23 gTLDs for sale at the April 28 auction: .audio, .blackfriday, .christmas, .click, .country, .diet, .flowers, .game, guitars, .help, .hiphop, .hiv, .hosting, .juegos, .link, .llp, .lol, .mom, .photo, .pics, .property, .sexy and .tattoo.

It’s not clear which of these was “mistakenly listed” and bought separately by DigitalAMN. When UNR announced the closure of the auction, it only said that it had sold “20+” of the names in its portfolio, though the company later confirmed to DI that all 23 had been sold.

The identities of the buyers, which may number as many as 17, have not yet been revealed. All 23 contracts appear to be still subject to ICANN’s regulatory scrutiny, even six months after the auction.

In a press release today, DigitalAMN CEO Ajene Watson said:

We believe this venture continues to support our ethos and mantra. Especially given the name of this gTLD, what it may represent culturally to a multi-billion-dollar global marketplace, and the anticipated financial literacy initiatives that could potentially be born from it.

Which strings does “financial literacy initiatives” suggest? .llp? .property? Your guess is as good as mine.

The press release states that DigitalAMN has two domain industry partners in its new venture. Again, they’re not named, but we can probably assume one’s a back-end registry provider.

DigitalAMN is listed on the over-the-counter markets in the US. It reported $145,000 of consulting revenue in the six months to June 30, but was burning cash and said it needed another $2 million to survive the next 12 months.

It calls itself a Public Accelerator Incubator (PAI) company, which appears to be a term of its own invention. It says it “operates an ecosystem that fosters growth opportunities for entrepreneurs looking to build their businesses”.

This seems to mean it tries to get start-ups investment through means such as crowdfunding and access to capital markets through “mini-IPOs” made possible through the US JOBS Act of 2012.

The company is possibly one of the “blockchain companies” that UNR referred to when it announced the auction results back in May.

DigitalAMN says it intends to introduce “new value-added services, leveraging the newest technologies incorporated in digital wallets and crypto currencies” to its new gTLD.

It’s going to be interesting to see what the company has in mind.

UPDATE: this article was updated November 5, 2021, to remove an inaccurate reference to the company’s Bitcoin position.