The domain name Sm.art, which was registered for $5,000, was revoked, and the high price offered for its re-registration sparked public outrage

Recently, a Chinese domain investor revealed that the Sm.art domain, registered for $5,000, was reclaimed by the .art registry, resulting in a complete loss of their initial investment and drawing industry attention.

This incident not only caused financial losses for the investor but also highlighted the potential policy and regulatory risks in the domain investment field. Even more infuriating is that after the domain was reclaimed, the price for re-registering it has now skyrocketed to 219,188 RMB (approximately $30,000), roughly six times the investor’s initial $5,000 registration price.

This outrageous price increase has further fueled investor discontent. Many industry insiders believe that this practice of “reclaiming and then re-registering at a high price” demonstrates the unprofessionalism and unreasonableness of the relevant registrar, setting a negative example for the industry.（Article information source: WeChat groups in China）

The Sm.art domain, with its simple and memorable spelling and its association with the arts, inherently possessed investment value, and the decision to register it at a high price stemmed from a positive outlook on its market potential. However, domain registration is not a “one-and-done” process. Registries often possess domain management authority based on their own rules, and common reasons for domain revocation include being placed on a reserved list, failing to meet registration qualifications, or violating the registration agreement. While the specific reasons for Sm.art’s revocation are unclear, considering the subsequent surge in re-registration price to 219,188 RMB (approximately 30,000 USD), a six-fold increase from the original price, it’s difficult not to question the registry’s motives—most likely, to reap exorbitant profits through “revocation followed by price gouging.”

We believe that regardless of the reason for revocation, registrars should adhere to the principles of transparency and fairness, clearly informing investors of the reasons. This near-predatory price gouging and re-registration behavior severely damages the legitimate rights and interests of early investors, disrupts the fair order of the domain investment market, and seriously erodes industry trust. This incident should serve as a wake-up call for all industry practitioners.

For domain investors, high-priced registration does not guarantee absolute ownership. Compared to chasing the premium potential of scarce domain names, it is more crucial to clarify the rules and terms of the registry beforehand and verify whether the domain name is subject to reservation or dispute risks. This incident also reflects the unique nature of the domain name investment market: asset value depends not only on the meaning and dissemination of the domain name itself, but also on registration rules and management policies.

The core of domain name investment is the prediction of the value of digital assets, but risk control is always the prerequisite. The case of Sm.art being reclaimed and its subsequent registration price soaring to 219,188 RMB (approximately 30,000 USD), a six-fold increase from the original registration price, should remind all practitioners that in addition to verifying registration rules, choosing a compliant and trustworthy registrar is equally important. We must abandon the misconception that “registration equals peace of mind” and verify the rule risks and registrar qualifications from multiple dimensions to avoid falling into the double dilemma of “investing heavily but losing everything, and then having to pay double the price to re-enter the market.” This is also an important prerequisite for protecting one’s own rights.