In 2021, one of the most desired commodities to buy/sell/lease is IPv4 addresses. AFRINIC or African Network Information Centre is the Internet Numbers Registry of Africa and it recently landed into deep trouble. The organization had its bank accounts frozen on 23rd July 2021, due to a fraud committed by a Chinese company.
In an address to all the AFRINIC members, the CEO, Mr. Eddy Kayihura shed light on what caused the bank account freeze, how they are dealing with this situation, and what lies ahead.
What caused AFRINIC to land in this trouble?
So, the story goes on like this – A Chinese company, Cloud Innovation is the root cause of this situation and is being blamed for causing legal terrorism.
Cloud Innovation possesses 6 million IP addresses that were acquired many years ago. This agreement between AFRINIC and the company was a cause of rift within AFRINIC for a long time. Cloud Innovation is suspected of using a large part of the IP addresses in China (RIR is APNIC for the Chinese region) and not in Africa.
However, Cloud Innovation is registered in Mauritius which comes under AFRINIC. But closely works with its counterpart Larus Limited, a Hong Kong-based company. An investigation by Internet investigator Ron Guilmette in 2020 shed some light on the use of IPv4 addresses. It came to light that just 6% of the total IP addresses are used by Cloud Innovation in Africa.
The flaw in Registration Service Agreement to buy/sell/lease IPv4 Addresses:
There is a Registration Service Agreement between AFRINIC and Cloud Innovation. The agreement doesn’t specify the jurisdiction of where the IPv4 addresses can be used. This is a loophole that Cloud Innovation took advantage of. AFRINIC says that IPv4 addresses are meant for Africa and the Indian Ocean region only. However, there is nothing written in the agreement that specifies this.
Nevertheless, AFRINIC gave Cloud Innovation time from 23 June 2020 to 14 July 2020 to comply with their Registration Service Agreement. Meaning Cloud Innovation will need to divert all the IP addresses from the China region to the African region.
However, Cloud Innovation said it is not violating the agreement, since in the agreement AFRINIC’s policies did not restrict where and how they were allowed to use the global IP addresses. And yes, Cloud Innovation is right in saying so. But AFRINIC says it is an unwritten rule by RIRs for all companies whom they give IP addresses to use it only in their region and not anywhere else.
Eventually, Cloud Innovation’s non-compliance with AFRINIC’s agreement caused the RIR to block the IP addresses. This hampered Cloud Innovation’s business operations quite a bit. The company approached the Supreme Court of Mauritius for help. The Supreme Court then passed an order against AFRINIC. In the order, one of AFRINIC’s bank accounts is frozen that amounts to $50 million USD.
How is AFRINIC dealing with this crisis?
AFRINIC CEO said in his address that only the outflow of funds has been affected after the court order. AFRINIC sees this as a temporary setback. It hopes that the Supreme Court of Mauritius will make an acceptable decision in due course.
What lies ahead for AFRINIC and will it be able to conduct operations like buy/sell/lease IPv4 addresses?
AFRINIC is taking the following steps to ensure the smooth running of the RIR’s operations:
- Use the e-judiciary system since COVID-19 protocols are in place. They would make an appeal to the court to allow AFRINIC to use the bank funds. Bank funds will be used for critical expenses like staff salaries etc.
- AFINIC may also reach out and request the other RIRs for the joint RIR stability fund (established way back in 2015). This fund could help to maintain a healthy internet eco-system. This option may be sought for only if the court does not accept AFRINIC’s appeal.
- AFRINIC also hopes to contact suppliers to extend grace periods due to the legal battle.
The non-profit organization also hopes to explore other possibilities if need be.
What can we learn from AFRINIC’s situation?
We can learn from AFRINIC’s current situation that any agreement between a buyer/seller/lessor/lessee must be fully proof and clear. That is why is it very important that only a reliable & registered IPv4 Broker like Alpha InfoLab must be used. You must also use only the best global IPv4 address marketplace like IPv4.deals where you will find the best IPv4 deals to buy/sell/lease for IP addresses. Alpha InfoLab is one of the leading facilitators of sales and purchases of IPv4 addresses.
In conclusion, we can say that AFRINIC may have a long legal battle ahead. Yet it is a lesson learned that AFRINIC may in the future have stricter agreements and policies. This will not allow companies like Cloud Innovations to bend the law for their own selfish needs.