news Epik continues to dig out from financial mess

[NameInbox]

Domain name registrar Epik continues to dig itself out of a financial hole, but new problems continue to pop up.

The registrar offers a type of store credit called Masterbucks along with an in-house escrow service. Epik was using money from both of these to fund its operations rather than keeping the funds in separate bank accounts. The company also didn’t have an escrow license.

It wasn’t apparent that the money was being used to fund operations (or otherwise unavailable) until customers became spooked that they wouldn’t be able to get their money back. That created what amounted to a run on the bank — and Epik didn’t have the funds to pay back all of its customers.
Epik brought in new management in September that is chipping away at these debts, but it doesn’t have the cash on hand to fund operations and make everyone whole today. It’s in triage mode, taking any new profits that come in and paying them out as available.

Recently, the company sent an email to some customers stating:

When new management took over Masterbucks, the balance was approximately 4.5 million dollars. Through our dedicated and expeditious efforts, the new management team has brought that number down to just over $800k and change.

But last week, a representative of domain seller DomainEmpire posted a review on TrustPilot saying it has a balance of $1.5 million in Masterbucks that it has not been able to withdraw. It accrued this money from domain sales, it stated.

According to DomainEmpire, former Epik CEO Rob Monster offered it 6% annual interest if it kept its money in Masterbucks.

I asked new CEO Brian Royce yesterday via email about DomainEmpire’s $1.5 million debt. He said the number was news to him. He also said that the $800k quoted in the email was no longer correct even without the DomainEmpire number, because he just became aware of another debt of over $300,000 that wasn’t in Masterbucks, bringing the total (without DomainEmpire) to $1.1 million.

It seems that there is no clear record-keeping for the new management, which adds to the challenge.

More details about the blowup at Epik this year are starting to trickle out. A former contract EVP of Operations for Epik sued the company this year, saying he has not been paid. The case was settled. In a court filing (pdf), an attorney for Epik wrote:

While working for Epik, the Plaintiff began working with one of Epik’s chief customers–JJE. JJE offered and invested into a plan for ownership in Epik. Within a few months, however, JJE changed its position and asked Epik if JJE could divest from their investment in Epik. As an agreement and negotiations between Epik and JJE progressed, JJE broke off from their original offer to Epik and negotiated for a settlement.

Monster had previously said the company received a $32 million investment. That investment didn’t fully come to fruition.


source: https://domainnamewire.com/2022/12/01/epik-continues-to-dig-out-from-financial-mess/

 

[Recons.Com]

Chris cant say anymore ,he will try to keep Epik alive ,''whatever it takes"

"Whatever it takes" apparently now means soliciting new escrow deals without mentioning to people that their funds then will be transferred to a "standalone" wreck-of-a-company of Masterbucks and won't be paid off until an indefinite date in the future, if ever.

Mr. Royce is playing games with the livelihood of people with the amounts that make difference for many between good life and being broke and he keeps bringing more and more people into this disastrous circle.

If few people come together, get lawyered up well, it is quite possible that people can go after personal assets of Mr. Royce and Mr. Monster, because what they are doing shouldn't and couldn't have normal ring-fenced protection of an LLC.

 

[D Haynes]

With the Great Recession market, any registrar could be in a similar situation, no one can be sure. Maybe only Cheap and Daddy can laugh at this time

Their situation is of their own making, not the making of a recession market.

 

[Chris Hydrick]

Chris cant say anymore ,he will try to keep Epik alive ,''whatever it takes"

Just curious why the sudden change... Were you finally paid what you were due and that's why the sudden change, or did you learn anything that would suggest Brian is capable of being a competent domain registrar CEO? Not to question your integrity Frank, but without knowing more, it seems like Brian paid you off, and now you're back on team epik. I hope there's more to it than just one selling their soul.

The epik/masterbucks relationship is starting to sound a lot like the ftx/alemeda relationship. The way epiks trustPilot representative has been responding to epik escrow customers due hundreds of thousands of dollars is reprehensible.

The only public facing things Brian has done thus far since joining epik is (1) tweet elon musk (2) issue misleading statement about mastebucks balance (3) did a dnw interview where Brian admitted there was commingling of funds.... I hope Brians next move is something more meaningful, until then, I'm expecting (4) to be Brian tweeting Kanye in hopes of Kanye buying epik.

 

[bmugford]

Just had a message from Brian . I think we have to give him some time get all the problems sorted out .
He just has to ''remove'' some dead wood,etc .
Also he is definately NOT a Rob Monster clone .

Just curious why the sudden change... Were you finally paid what you were due and that's why the sudden change, or did you learn anything that would suggest Brian is capable of being a competent domain registrar CEO? Not to question your integrity Frank, but without knowing more, it seems like Brian paid you off, and now you're back on team epik. I hope there's more to it than just one selling their soul.

The epik/masterbucks relationship is starting to sound a lot like the ftx/alemeda relationship. The way epiks trustPilot representative has been responding to epik escrow customers due hundreds of thousands of dollars is reprehensible.

The only public facing things Brian has done thus far since joining epik is (1) tweet elon musk (2) issue misleading statement about mastebucks balance (3) did a dnw interview where Brian admitted there was commingling of funds.... I hope Brians next move is something more meaningful, until then, I'm expecting (4) to be Brian tweeting Kanye in hopes of Kanye buying epik.

"Whatever it takes" apparently now means soliciting new escrow deals without mentioning to people that their funds then will be transferred to a "standalone" wreck-of-a-company of Masterbucks and won't be paid off until an indefinite date in the future, if ever.

Mr. Royce is playing games with the livelihood of people with the amounts that make difference for many between good life and being broke and he keeps bringing more and more people into this disastrous circle.

If few people come together, get lawyered up well, it is quite possible that people can go after personal assets of Mr. Royce and Mr. Monster, because what they are doing shouldn't and couldn't have normal ring-fenced protection of an LLC.

Quite an about-face there.

I can only judge Brian Royce from his actions, or lack of actions.

This problem goes back 3+ months now and Epik reportedly owes millions of dollars to customers.
They are unable to pay that amount, yet still are soliciting new business in the same field without mentioning that.

They are enabling sales that end up with the seller transferring their domain, and being stuck with Masterbucks that who knows when, or if, they will be available for withdrawal.

I expect the authorities to catch up with Epik eventually. They commingled customer funds with other funds, as an unlicensed escrow agent. That is a massive problem.

Customer funds are not their slush fund to do with as they please.

Brian has largely been radio silent, outside a few comments to domain blogs and some tweets kissing Elon's butt. My view is that he is incompetent as CEO, especially when it comes to communications. There is zero engagement with customers.

Brad

 

[NYJimbo]

Trustpilot:

LOL !

 

[NYJimbo]

Hilarious how they are doing this now on Trustpilot:

Blame the "other company", even though its really Epic's company thats hiding behind a company name in Wyoming.

"We paid out your funds, its Masterbucks fault if you don't get it."

Great scam.

 

[bmugford]

I'm not putting in a good word for epik, I'm trying to make the point that we should be sensitive to every registrar. You need to be vigilant for your property and not just follow KOI.
It may be epik now, but perhaps someday soon another registrar will be in a similar situation due to the Great Recession environment? We should be so vigilant that once we notice something unusual in the details, we should react to protect our assets.

When you act as an escrow agent, then commingle customer funds with other funds that is the root issue.

These funds were not Epik's slush fund to play with. They were simply stewards of assets owned by third parties.

This can't happen with a company that is property licensed and follows industry standard practices.

Imagine if you were closing on a house, and you show up and the title company just spent your money on something else. Imagine if a lawyer collects a settlement on your behalf, then just spends the money on something else.

It is not possible if you keep customer funds separate from other funds. There is a reason the field is highly regulated, to avoid this type of nonsense.

It is Epik's behavior that lead to this outcome. The economic conditions might have exacerbated the collapse though.

Brad

 

[bmugford]

With the Great Recession market, any registrar could be in a similar situation, no one can be sure. Maybe only Cheap and Daddy can laugh at this time

No.

This is what happens when you act as a "self-governing" escrow agent and thumb your nose at proper licensing and regulations.

Brian Royce already said that under Rob's leadership these funds were "commingled". That is a massive no-no in business.

People in professional fields like law, finance, real estate, etc. would lose their licenses or face even more serious consequences for these type of actions.

Brad

 

[b_i_t]

I'm sorry for those that have money stuck there. Glad I've never used Epik's services.

 

[D Haynes]

There wasn't and this wasn't caused by a "run" on Epik. They just stopped paying out without warning. The situation is entirely of their own making.

 

[Chris Hydrick]

Brian is capable of being a competent domain registrar CEO - Yes
it seems like Brian paid you off, NO
now you're back on team epik NO ,
You can check my twitter page and see that i am now an affiliate for Dynadot
There is nothing more I know or can say .Im just hope for Epik's staff[not all] that he fixes the problems and the good people there have jobs to feed their families.
. I still have avout 700 domains there and selling them at $10 each ,so I can leave Epik after about 5 years of helping to make it a good registrar. Btw Im 76 yrs old and want to get out of domaining alltogether.
Chris you can always DM Brian on his linkedin account.

https://twitter.com/DomainFrank

IDK man, from unhinged frustration, to seemingly no qualms appears like a crock of shit to me....

Everybody who has a dynadot account has a refer a friend referal code. Seems odd that somebody wanting to get out of domaining is attempting to pick up a new domaining related revenue stream. I guess after years in the biz, completely leaving domains is out of the question. Anyways, thanks for chiming in @franka46 ... I hope you weren't bullied, manipulated, or intimidated into changing your tune.

 

[branding]

At least 1.8M of debt the CEO wasn't aware of...

Insane figures. What a mess.

 

[branding]

Epik changed expiration renewal days out of the blue, those that had grace periods of 35+ days (extended by being Namepros members or other reasons) just got defaulted to 30 days without warning.

Got this by mail:
Epik has recently made a change to the grace renewal policy. As you are aware, Epik only gave a 15-day grace period. Well, we have listened and heard our customers. Our grace renewal period is now 30 days, which starts on the day of expiration. Please do note this 30-day grace period does not apply to all GLTDs/cctTLDs, so we encourage you to make sure you still log in and take note of the "renew by" date listed inside of your Epik account.

For those of you who might have had your grace renewal period altered in the past, your grace period is set to 30 days as well.

Epik is here to support all types of end-user or domain investors. We greatly appreciate your business. Have a wonderful week ahead.

 

[VadimK]

Guys, sorry, I may be missing something, but what is the purpose of this thread? Epik is talking to somebody (to others - not), paying to somebody (to others - not), doing something (or not). Like pretty much always for the past few months, no?

 

[411domains]

Ah ,Now we know ,Domainers are NOT important for Epik.com

I'm fairly certain he's going to regret that reply.
I can't even believe he said that.

 

[GoKaizen]

It's ridiculous all the changes Epik is making without notifying customers.

I was not aware too, when I received the email saying that my domains was dropped, I immediately contacted Mr Sufyan that told me that they sent the email about the change to all customer and he can see on his system that I received the email (never received) and that I read the email, lol, I searched everywhere and I didn't saw the email, they refused to restore the domains and after that I find from other people that they did not received the emai and that the change was made the same hours they say that they sent the email out.

I haven't received it either.

 

[xynames]

The below might be old news to most of you but other than listing all my domains at Epik marketplace on a non-exclusive basis, I haven't used Epik for anything so I wasn't following up on all the Epik news until recently.

What I assume happened
https://domainnamewire.com/2022/12/30/an-epik-crash-2022-top-stories/
is that the investor in Epik who had already infused his first round of capital asked for certain changes before putting in the second round, and part of that change was that Rob Monster step down as CEO
https://domainnamewire.com/2022/09/02/epik-gets-new-ceo-as-rob-monster-moves-to-non-executive-role/
and perhaps also stop posting publicly as the face of the company. Maybe the Monster was even asked to stop posting period, hence his disappearance from NamePros since September/October.

In the past I had also mentioned that Epik could not (or rather should not) function like an escrow without becoming licensed and bonded

If it walks like a duck quacks like a duck it is...an escrow! and should be licensed regulated bonded all that.

This goes for UNDeveloped
https://dan.com/legal/terms-of-use
where the "Contractor" (UNDeveloped / DAN) is defined in their Terms of Service as the party that handles the transfer of the domain from the Provider (seller) to the Transferee (buyer) via Contractor's "escrow account"

and Epik "Escrow"

flat out mentions that it is an escrow too.

As far as the argument of "what could go wrong," I'd agree that the risk is small, but then so is the risk of your house burning down, so why bother with home insurance then is what the Monster appears to be saying here:

because Errors and Omissions and Directors and Officers insurance cover negligence only, and only negligence by Epik, not intentional acts of fraud by anyone, and might not cover the sorts of issues that might arise in an escrow, such as if a stolen domain were sold to a party, and then later retrieved via ICANN, leaving the buyer out the funds paid, unless Monster is saying that he'd step in and say "this is all our fault we should have screened the domain better" because absent such an admission, their insurance will not cover!

This is getting a little ridiculous here, either you're a licensed and bonded escrow, or you're grasping at straws at how you might cover a claim. I will agree that at least Epik is musing on how they might cover a claim, I can respect that, --- while UNDeveloped's game plan is to leave zero assets in their "escrow like" non-profit entity to avoid liability entirely - can't squeeze blood out of an UNDeveloped turnip is DAN's defense.

and apparently eventually at least one state's Department of Insurance caught on and fined Epik for their practice
https://www.insurance.wa.gov/news/kreidler-issues-11000-fines-violations-january

DAN got away with what it was doing maybe because no one complained and it was based in the Netherlands. Perhaps now that GODaddy owns DAN this sort of pseudo "escrow" service will disappear from DAN's offerings.

 

[xynames]

And indeed Dan has quietly removed the word "escrow" from its terms of use.

and Epik escrow is of course, not currently offered.

 

[franka46]

Ah ,Now we know ,Domainers are NOT important for Epik.com

 

[franka46]

https://twitter.com/x/status/1604233037809520640

 

[bhartzer]

Does anyone know of any domain attorneys who are representing people with regard to Epik?

If you send me a PM I can recommend a few I know about.

 

[NameBuyer.com]

Hi, about this: "If you send me a PM I can recommend a few I know about." can you please help me and give me some email address of lawyer, I'M having very big problems with Epik that are stolen my domains

Several of us are having the same issue. Stolen domains then using extortion to collect $99-$199 for domains that were taken with no notice of the policy change and no one-time grace restoration offered as would have been under Rob.

In my case, it was about 20 domains, so they wanted me to pay $1,980-$3,980 to restore those domains even though there was zero notice before they changed their policy for me from 35 to 30 days.

 

[NameInbox]

and more here
https://www.trustpilot.com/review/epik.com

 

[DomainEmpire.com]

Icann can offer a prompt support regarding domains illegitimately stolen/locked/not renewed from the registrar Just submit your complaint here by specifying exactly the involved names, registrar, account id and by providing screenshots to proof what you're asserting is true:
https://www.icann.org/resources/pages/complaints-2013-03-22-en

You'll get a reply within few days after that they'll give a deadline of 5 days to the registrar to release your names/fix the related issues.

Multiple complaints will soon result in the lost of their Icann accreditation.
I saw this happening a couple of times several years back with small non cooperative registrars though I can't recall to the mind the involved registrar names ...