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ccTLDs of Politically Unstable Countries, Example: .ly and Libya Sanctions

I just read that Libyan Spider, a reseller for .ly has been suspended by it's hosting company for violating US/UN sanctions. This is posted on the front of their website:

March, 31. 2011

Dear LS clients,

Our servers have been shut down by softlayer.com

We are currently trying to resolve this issue. They believe we fall under the blocked list of the UN/US sanctions.
We are a private company run by ordinary citizens that have no affiliation with the government. We are currently trying to
resolve this issue as soon as possible. This is out of our hands until softlayer.com can reactivate our servers. Please contact
them too to show them that you too are affected by this shutdown. We really are sorry that this error of judgement has occurred.
It is a complete injustice to us. They shut us down without even checking to see if we fell under that category. We will release a statement shortly.

Please email us at support@libyanspider.com
We hope that this issue will be resolved soon.

Best regards,
Hadi Naser
CEO Libyan Spider, LLC.

So the interesting question becomes, what sort of extensions really are sensible for a company to use? Can you imagine that you're violating a UN sanction for buying your domain name from a country that is attacking it's own people?

This registry in particular has a history of questionable practices which have brought up the concern about what extension/registry/country you use for your domain name. Is this just another concern nobody conceived of until it happened?

It seems to me, sticking with the popular gTLDs (com/net/org, hell, I will even throw in info/biz for stability) is an even safer bet these days. Is that better sounding name from a foreign country really worth it?

To finish this the only way I can see appropriate, a little domain humor.

Beeth> Girls are like internet domain names, the ones I like are already taken.
honx> well, you can stil get one from a strange country :-P

Source: bash.org