U.S. registrars accused of running front companies

By Justin Mann on July 25, 2006, 11:12 AM
Domain name registration has long been a touchy subject. We have web squatters swooping in to steal a name the moment it expires, and name server poisoning as part of denial of service attacks. We even have malicious people registering a name similar to a popular site in the attempts to lure people over(called ”typosquatting”). What's more, it seems that some companies are banding together to register thousands of domain names for the express purpose of reselling. In and of itself, that hasn't been much of a problem – until it was revealed that the companies registering those names were actually fronts for the name registrars themselves:

According to EURid, the three companies are a front for a "syndicate" of 400 U.S.-based registrars, which stand accused of "warehousing" the domain names--registering them speculatively for resale, rather than following a client's request.
Because registrars cannot acquire a name for themselves, three U.K. based companies named Ovidio, Fausto and Gabino were created expressly to do this. Over 74,000 names were registered in total. What would one do with 74,000 domain names, besides reselling them?

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