You're right and I agree with all of these options. Also, I wouldn't want to be forced to work with a company I didn't want to do business with or that I thought was a liability.. unfortunately this isn't happening with DirectNic.
Directnic has locked the domain, forcing the site to stay under their service, instead of allowing them to switch to another registrar. So in fact, Directnic is forcing liability upon themselves by continuing to serve the domain.
If Directnic would have just sent the guy their demands and consequences if they didn't meet the demands, that would be fine. And if every other registrar they went to demanded the same thing, that would be GREAT! But locking a domain is something, if this catches on, that could be very detrimental to legitimate adult businesses and asking for ID's is overstepping the boundaries. If Directnic would have given them notice and just dumped them out of suspicion I'd be fine with that, but the way they are doing it is wrong. You see what I'm saying?





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