In a thread on Namepros about Rob Monster and Epik, Joseph Peterson posted an interesting tidbit, one that if it plays out as Joseph speculates it could, will affect all the big players in the domain aftermarket space and domain investors as well.
The history starts on another thread, it’s very long and you can read it at your leisure if you desire. The short version was a thread that was focused on Epik’s escrow was questioned by Jackson Elsegood of Escrow.com. Jackson asked if Epik was a licensed escrow agent?
The thread goes back and forth, and I will leave it to you to make up your own mind.
But now tonight Joseph posted the following:
Now this just came out and I would like to hear Sedo, GoDaddy,BrandBucket and the others weigh in.
Sedo TOS says the following: The Domain Transfer and Escrow Service offers users Sedo’s assistance with the purchase and transfer of Domains. Sedo acts here neither as a buyer or seller, nor as the representative of a buyer or a Seller, nor as a broker. Sedo acts as a secure technical and financial intermediary and will hold the purchase price in escrow for the Buyer while the Seller transfers the Domain. Upon conclusion of the Domain transfer process, Sedo will release Buyer’s funds from escrow and forward the purchase price to the Seller, less applicable fees.
Thank you for posting something of importance compared to those who keep babbling about their personal politics. Is Escrow.com not a partner for most of these marketplaces?
Epik is an accredited registrar. Since they had to get accredited, I’m sure they would like the competition to play by the same rules/laws.
The reverse is true. Escrow.com is accredited, so if you want to advertise as an Escrow service, why be shocked that they want them to be accredited as well.
I don’t see those other places like Brandbucket advertising themselves as having an Escrow service.
BrandBucket handles payment, same way as another company would.
Since BrandBucket is an open marketplace and the domains are owned by several different people, the transfer time can be affected depending on the response time of the seller. We do our best to speed the transfer process by training our escrow team to facilitate this communication and to eliminate common roadblocks.
https://www.brandbucket.com/faq/what-happens-after-i-buy-a-name-from-brandbucket
Managing Your Listing
We will suggest a listing price for your name, which is often 2 to 10 times what you can get elsewhere. You can increase the price 10% or 20% at anytime using our new streamlined price manager. BrandBucket charges a consignment fee of 30% which covers marketing, payment processing and escrow fees.
You missed the point. They don’t say they offer Escrow services. Epik can simply become accredited or just stop advertising they are. There is a good thread at Namepros where Escrow.com and Berryhill make some good points:
https://www.namepros.com/threads/if-you-are-not-using-epik-com-for-escrow-you-are-wasting-time-and-money.1119508/
I am not missing any point, and the link you included is in the article above. They used Escrow in a thread correct, all companies like BrandBucket are providing the same service.
I think Joseph has laid it all out in his comment here.
I think companies just use the familiar term escrow, but they all take money and then send money out to the seller.
Yes, Jackson Elsegood of Escrow.com instigated complaints against Epik for assisting in domain sales without an escrow license.
Currently Epik has received 3 complaints from 3 different state agencies. They arose simultaneously and coincided with an ad in NamePros offering to secure domain sales absolutely free of charge for NamePros members.
Epik is a registrar and has follow-on services for customers who transfer domains to Epik as part of a sale. So that model makes sense for us or any registrar. ; and, since they depend on fees, they cannot d
I am in possession of the email Jackson Elsegood, acting on behalf of Escrow.com, sent to 1 state agency. It contained various outright falsehoods and misleading statements by Jackson, who certainly knows better and is acting deliberately to sabotage a company he regards as a rival.
At some point, I will publish his letter so that others can judge its dishonesty for themselves. He claimed to have only lately run across Epik. And he pretended that our company is called “Epik Escrow”, insinuating that we act primarily as an escrow agent without mentioning that we sell domains primarily as a domain registrar and that our marketplace is a common feature of many registrars. State agencies acting at Escrow.com’s behest have even referred to “Epik Escrow” as the name of our company, lifting it verbatim from Jackson’s letter.
Additionally, he falsely alleged that Epik claims to be an “accredited escrow agent”, which we never have done. He even cited Epik saying that we are an ICANN “accredited registrar” to prove that we’re pretending to be an “accredited escrow agent” … as if he didn’t know the difference! Easy to mislead state regulators, but Jackson knows very well the difference between an escrow agent and a domain registrar.
Given the timing, as well as the lack of any denial to my assertions by the state agencies themselves, I assume all 3 complaints were due to Escrow.com’s sabotage campaign. For all I know, Jackson wrote to other state agencies as well. Perhaps all 50? We only know of the 3 who took his bogus complaint seriously and contacted Epik.
Escrow.com has only a tenuous connection to domains at all. Their lease of Gab.com would have failed completely if Epik had not rescued the domain by accepting a transfer to Epik. In so doing, Epik rescued Escrow.com’s credibility. And Epik withstood a public backlash as a result of being the only domain registrar protecting freedom of speech in that case. It is therefore doubly disappointing that Escrow.com is stabbing Epik in the back and pretending to state regulators not to have heard of Epik until just now.
State regulators now believe, thanks to Escrow.com, that any aftermarket domain sale through any domain marketplace, may require an escrow license – perhaps in multiple or all states, not to mention overseas jurisdictions. If state regulators act in these cases, then the inevitable conclusion will be a demand for escrow licenses at all domain marketplaces.
Escrow.com probably intended only to sabotage a rival. But the consequence of their action may bring regulation to the entire domain aftermarket. There is no logical way in which the Epik Marketplace would require an escrow license whereas Afternic, Sedo, Uniregistry, BrandBucket, GoDaddy Auctions, NameJet, and others would not.
So far, I have written about 6 detailed replies to the 3 state regulators in question. They are demanding sales records for marketplace sales. Monday I had a meeting with 1 regulator, and he told me that he believes the action of any 2-sided marketplace – meaning a platform that allows sellers to list and buyers to buy – may constitute escrow and require licensing. If so, that is a very long list of companies that will need to be regulated.
At this point, Escrow.com can’t put the genie back in the bottle. They may not have intended to cause regulators to look at all domain marketplaces, but that is where this is heading. Bravo, Jackson! Accident or not, Escrow.com stands to benefit enormously if it can add regulatory burdens to ALL domain market places and force many of them to go through Escrow.com.
I didn’t intend to bring this up today. It was just a passing remark, since I have been occupied with the Escrow.com sabotage efforts on a daily basis last week, over the weekend, and this week, including meetings with state agencies where the broad implications are being discussed openly. Regulatory agencies like collecting more fees.
To me it seems unnatural to use an escrow agent. Domain registrars have direct control of the domains – both access and ownership records. They, unlike escrow agents, are regulated by ICANN. After GDPR, escrow agents can’t effectively see who owns a domain; but the registrar can. When there are disputes, an escrow agent depends on a domain registrar to solve it. An escrow agent is just a registrar customer, and often they’re not even the customer who holds the domain in question. Why add the extra unnecessary 4th party of an escrow agent? It’s sufficient to have 3 parties: buyer, seller, and registrar. Buyer and/or seller already have relationships with the domain registrar. Registrars are where domains are bought – fundamentally.
It’s time for Escrow.com and the whole escrow-agent model to go the way of the dinosaur. Even if they weren’t sabotaging competitors, that would be true. Domainers have been complaining about Escrow.com’s decline ever since they were acquired by Freelancer and forced Brandon Abbey out of the company. We’ve seen other escrow companies be gobbled up by Escrow.com or sidelined or leave the industry: Payoneer, EscrowHill, Agreed.com, Ecop. Now there is a lack of competition.
The answer isn’t a new escrow agent. It’s for domainers to stop using escrow agents and go through domain registrars. With Escrow.com jeopardizing all domain marketplaces merely to maintain their tenuous toe-hold on domain transactions, I think it’s time to think about other ways to sell domains without using Escrow.com or similar escrow agents at all. They’re really not very secure, as the Gab.com case made clear. GDPR makes them even less reliable. But the registrar can always deliver a domain with a push. So much simpler and more reliable to trust the registrar directly.
”I am in possession of the email Jackson Elsegood, acting on behalf of Escrow.com, sent to 1 state agency. It contained various outright falsehoods and misleading statements by Jackson, who certainly knows better and is acting deliberately to sabotage a company he regards as a rival.“
WOW, what a RAT. Shameful!
Why doesn’t EPIK sue ESCROW.com for slander, and such false statements which bring financial harm?
@Mike, It’s not out of the question. I’m neither a lawyer nor a litigious person. But I found myself googling “tortious interference”.
In the past, I defended Escrow.com in public when domainers were complaining about the decline in service after Brandon Abbey’s departure. Now that I have a more personal experience with this management team’s dirty tactics, I see why nobody trusts them. A couple of years ago, bloggers were overjoyed to see Payoneer get into the escrow business. They didn’t stick around.
But we don’t need escrow agents. It’s time to wake up to that fact. Domain registrars are the natural intermediaries. And they are ALWAYS involved, even when there is a superfluous escrow agent trying to cash in.
Just to be clear, Regulators in at least 1 state have decided that ALL domain marketplace sales are escrow. We don’t know whether they’ll decide to push for a license. Hopefully not. But if they do, it will spill over to the whole industry. For the moment, they are looking at Epik’s domain marketplace – all aftermarket sales.
Epik ha a contact form that uses the word “escrow” for explanatory purposes. But it’s just a facilitated sale through the Epik marketplace. Instead of charging the full marketplace commission of 9% or 5%, Epik charges 1.5% for so-called “escrow” transactions. That means transactions where buyer and seller have already arranged their own deal and come to Epik ready to go – as opposed to cases where the seller creates a listing and waits months or years for an unknown buyer to appear. But those so-called “escrow” sales are just marketplace sales fundamentally. The same buyer and seller could arrange the sale without Epik’s help using an Epik marketplace listing. It’s the same process. Just a discounted fee. As a matter of fact, Epik waives the fee for NamePros members, and that’s why Escrow.com filed a bunch of bogus complaints.
I didn’t get into that thread beyond the first few posts back when it started, but Iwas looking into Epiks “1.5%” escrow. Then I got to this part.
“Epik Escrow pays out in Masterbucks – an internal currency which can be used tax-free, and commission-free, for all Epik products and services. Masterbucks may be cashed out at a 5% fee”
So, 6.5% minimum if a seller actually want your money.
I saw this as shady/deceptive and that turned me away from using these services. For the 1.5% advertised rate, your money is paid out in a fake digital currency voucher that can only be used at Epik. Hell no.
You can cash out of Epik bucks via PayPal etc… you are not forced to spend on Epik products that would be absurd.
An “escrow” transaction at Epik would be 1.5% only. (Some cases differ.) And Epik has been waiving that fee for NamePros members.
There is no longer a 5% cash-out fee. Ignore that. It’s gone. In the past, when Epik charged no commissions at all, that fee was all Epik had. It was designed as an incentive to spend all or part of earnings at Epik on a domain portfolio (renewals and transfers) – instead of withdrawing the money and returning later to spend the same money on renewals. In between, there is a lot of waste on Paypal fees, wire transfer fees, etc. Plus, we want to keep customers.
Since the Epik Marketplace began charging a commission in 2018, it has been too confusing to have a cash-out fee too. Instead of a fee, we are planning to offer a bonus for spending earnings at Epik. It’s the same effect … but a carrot instead of stick. Nobody likes fees.
To be clear, here is what Epik commissions look like:
9% Direct Purchase
5% Monthly Payment Plan
1.5% Escrow
In this context, “escrow” just means that the deal has already been negotiated independently. Buyer and seller arrive ready to go. That’s what I call an “active” sale. As opposed to a “passive” long-term listing in a marketplace where a seller is waiting for some unknown buyer to arrive. In passive sales, the marketplace listing provides advertising for the domain; and the marketplace (not the seller) brings the buyer. That’s why it’s fair to charge a higher commission.
Epik uses the word “escrow” for branding this discounted commission rate. Domain registrars don’t need some external escrow agent in order to sell domains. Selling domains is simply what registrars do. Registrars are the official authority for selling domains, accredited by ICANN and ccTLD registries.
Escrow agents have no natural role in the domain industry at all. They’re interlopers trying to cash in on domains. An escrow agent will hold onto your money for you until you say that the painting / car / sofa has arrived or the web design / kitchen remodel has been completed. That can be a useful service. But it’s completely unnecessary with domains. Domains aren’t “shipped”. They aren’t “built” over time. A registrar can accept a buyer’s payment and move the domain to the buyer’s account in milliseconds.
There is no earthly reason to involve some extraneous person who holds the money, causes delays, and can’t even see whois records. Domain transactions are really just database updates. We already MUST depend on registrars to maintain accurate ownership data for domains. Escrow agents can’t do that. So why not just pay the registrar to reassign the domain to the buyer? We already trust domain registrars every time we register a domain, renew it, push it to a new account, or transfer it. Same thing here.
This makes no sense, do I need to do an escrow transaction on amazon when I buy a cell phone case on their marketplace? I believe domain registers are within their lane when transaction domain sales, and such.
Escrow is more of a real estate, or art work asset one enters into which allows for an inspection period etc.
I see their banner at the top, I guess they are an ad sponsor.
Nicely put.
Wow, that does not look good for Escrow.com. But I wonder why they are targeting Epik? I would be more worried about someone like Undeveloped that is doing brisk business both with regular marketplace sales and pure “escrow” sales.
Wouldn’t “2-sided” marketplaces also include a wide variety of other sites? Etsy perhaps, fiverr, odesk, Uber even?
Yes. I have made the same argument to the state regulators. They have an overly broad definition, which enables them to demand licensing from sectors that have historically never been asked for licenses. And they are now eyeing domain marketplaces. In order to defend Epik, I have explained that our marketplace sales are equivalent to those at many other domain marketplaces. And regulators have told me that they may begin asking all such domain marketplaces for state licenses in order to engage in aftermarket domain sales. Will they? I hope not. Epik is the test case, the proverbial canary in the coal mine.
Domain name registrars and aftermarkets should have had Internal licensed domain escrow agents from the beginning.
Unnecessary. Registrars sell domains. It’s their fundamental role. They are amply regulated by ICANN and other domain industry authorities.
What additional benefit would there be in requiring registrars to become licensed as escrow agents in 50 states + various other countries? And even if there were some putative benefit, since when is that expected or required?
I guess escrow.com is pissy that people are selling elsewhere because nearly every transaction is held up because of verification issues. I know I am tried of waiting days, weeks for things to get sorted when I can use sedo and be done in a couple days.
No buyer wants to give their passport to a company they don’t know or might get hacked to find all their data on the dark web.
Escrow is out of the loop because they are not a not a bonified domain registrar. What is being proposed means that any company that sells any product online needs to establish an escrow transaction.
I agree. I avoid escrow,com as much as possible because of their difficult (and unnecessary) verification nightmare for a buyer who are already nervous about buying a domain from strangers..
Sedo is my first choice.
I wonder if a law firm is exempt from having an escrow license in every U.S. state?
Law firms do escrow transactions every day. ???
Yes, law firms are exempt from licensing requirements for providing escrow services incident to client services. Various states may have differing minor limitations on that exemption, such as essentially running the firm trust account as an escrow business with no significant connection to transactional legal services. Many lawyers in the domain industry take engagements by parties seeking assistance in having a neutral party assist the parties reaching and drafting an agreement and providing transactional assistance including escrow.
Sedo sucks, because they wont let you use their escrow if the domain had ever been listed at Sedo. It could have been someone else 10 years ago, and domain changed 3 owners since then, but no escrow for you in that case.
State regulators are the primary regulators of Fintech companies, non-bank technology firms providing new delivery channels of consumer financial services, automated decisions, money transfer, and debt. State regulators understand Fintech needs a regulatory framework that fosters Fintech innovation while protecting consumers and making it easier for banks to partner with non-banks.
Work is proceeding on a Nationwide Multistate Licensing System (NMLS) that solves the complexity of Fintech licensing. States vision is to enable Fintech startups national scale with smart regulatory policy to transform the interaction between industry, regulators, and consumers.
It’s all based on a system of interstate RECIPROCITY. Fintech can use a license from one state to operate in reciprocating states.
State Regulators are currently identifying any last minute pain points driving towards harmonizing multi-state best practices then enhancing the automated Fintech licensing Reg-tech.
Joseph, please stop suggesting that whatever issues Epik is having apply to Uniregistry.com.
Uniregistry.com does not provide an escrow service and in fact utilizes an API to a licensed escrow provider for transactions in which the customers have elected to use escrow. Uniregistry.com’s terms of service expressly point out that Uniregistry.com does not provide an escrow service. Epik, on the other hand, does expressly provide “Epik Escrow” for which Epik charges a “$75 escrow fee” as detailed on the Epik site.
You are completely ignorant of what has gone on in other companies in relation to the regulators in question, and it would be useful for you to recognize that fact. Uniregistry received similar inquiries, and engaged specialized legal counsel to cooperate with state regulators to ensure compliance resulting in explicit clearance from a particularly influential state regulator in the fintech field, and the others bowing out. Uniregistry did not delegate something as critical to its customers as financial regulatory compliance to a tech employee with no relevant qualifications or, for that matter, to counsel who is not a specialist in that area. Having been through this drill in detail, it is readily apparent that Epik offers services and makes advertising claims which are significantly different from those of others you have named.
As one purely friendly suggestion, it might be helpful if Epik.com did not also provide fraudulent tax information to its customers. The Epik.com site states, as of today, “In most cases, swapping domains by using Masterbucks qualifies as an IRC Section 1031 tax deferred like-kind exchange . This tax advantage applies to the extent the domainer actually swaps (rather than merely sells for Masterbucks), though the swap can occur up to 45 days later under Section 1031.”
As has been pointed out directly to your CEO quite a while ago now, the Tax Cuts and Jobs Act of 2017 strictly limited the availability of IRS 1031 exchanges to real property, and real property only. It is fairly easy to see why one might have difficulty with financial regulators when one is advertising a fraudulent tax avoidance scheme in the first place – “an internal currency which can be used tax-free” – by reference to a type of transaction which has not qualified for that tax treatment for more than a year now under the relevant law, on the same page where the escrow service is described.
However, I am not here to run your company, give you advice, or debate the applicable law with you. Please consider this a simple request to stop making statements about events in other companies of which you are thoroughly ignorant.
Thanks for the input John, I do know Sedo, BrandBucket and Brandroot use the term escrow on their website and I don’t think they are licensed. I have never seen Uniregistry use the term escrow.
The state of California issued a cease and desist to Afternic before acquired by GoDaddy.
http://www.dbo.ca.gov/ENF/pdf/2014/Afternic_dr.pdf
As posted at Uniregistry.com:
———–
4. Completion of Sale and Use of Escrow.com
We do not provide an escrow service. Our “Secure Simultaneous Exchange” service allows a buyer and seller to transact purchases and sales through the Uniregistry Marketplace, but at no time do we hold the domain name or the agreed compensation in trust for either party pending completion of a transaction. At all times until the exchange, both the domain name and the agreed compensation are under the sole control and beneficial ownership of the seller and buyer, respectively, each of which may cancel a transaction at any time until the exchange is performed. Buyers and sellers wishing to use escrow services provided by Escrow.com shall be bound by the applicable Escrow.com terms of service and to the payment of fees to Escrow.com as agreed by the buyer and seller. We do not warrant the performance or security of transactions completed via Escrow.com.
Right that’s what I said Uniregistry doesn’t claim to provide their own escrow service. So they are in the clear, the other’s are not.
@John Berryhill,
Glad to hear you pay attention to Uniregistry. I don’t. That’s your job, not mine. And I daresay you do it well. If Uniregistry has insulated itself from state regulators, great. That doesn’t change the gist of my argument. You’d be a lone exception.
Regarding “a fraudulent tax avoidance scheme”, I have also advised Rob Monster to discontinue making such claims about tax advantages. I cannot vouch for their accuracy, since I’m not an accountant. And I would not wish to make such claims myself.
A more responsible use of language here, if you disagree with what is stated, would be “erroneous” rather than “fraudulent”. As you know, “fraudulent” implies intent to deceive; and I don’t think you have any basis for that accusation.
P.S. Text queued for removal. Thanks for the backup, @John Berryhill. I needed some reinforcements on this suggestion. And why pay a good lawyer like you when we can get free advice in the comments here at TheDomains? Cheers.
The state regulators are the banking commissioners. As far as they are concerned, if you’re not a real bank but you operate in finance as a non-depository fiduciary agent/institution then you are Fintech, regardless of whether you are a domain registrar, escrow, broker, lender, facilitator, solicitor, guarantor, insurer. Why should the state have to match every permutation with a dedicated bureaucrat.
Besides banks, the state regulates two things, automobiles and real estate, accomplished by issuing a TITLE or DEED for every single automobile or real estate asset. NOW, if you demand the state allocate public resources specific to domains, each state will establish a Domain Titling Division and issue a serialized Document of Ownership for every single domain asset, just like cars and real estate. Once that happens, you will pay a annual property tax to the state based on their assessment of your domains value.
Good for everyone who isn’t a real bank to simply apply for a generic FINTECH NMLS license. It’s cut and dried. You cannot convolute the states regulators clarity of logic by injecting ICANN into the equation. States don’t need help from ICANN to regulate financial activity. If you want to do business in our state, you register for a one size fits all FINTECH license and you’re free as bird.
Who do the state regulators report to? The Federal Office Of The Comptroller Of The Currency (OCC).
The OCC is The SEC’s boss. You’re better off cooperating with The States.