Violet Blue has lost its vb.ly domain for the reason. Actually for few of them. Although they now cry about the domain name taken from them, they missed it couple of times.
First of all, Violet Blue is an adult site. It is clear to every .ly player that .ly registry does not allow any adult or pornographic material. As presented in the official letter from Mr. Alaa ElSharif:
While letters ‘vb’ are quite generic and bear no offensive meaning in themselves, it has being used as a domain name for an openly admitted ‘adult friendly URL shortener’. Now, had Violet Blue domain merely been a URL shortener for general uses similar to bit.ly (as Violet Blue claimed) there would have been no problem with it. It is when Violet Blue promoted their site being solely for adult uses, or even stated that Violet Blue was ‘adult friendly’ to promote it that we as a Libyan Registry have an issue.
Secondly, being warned, Violet Blue, still ignored the issue and thought that they will just go away with it.
According to Libyan Spider they tried contacting Violet Blue numerous times with no avail, leaving Violet Blue a voice message on Violet Blue answering machine in the end. Not receiving their warnings doesn’t by any means relieve Violet Blue of the consequences of not heeding to them.
Child pornography is prohibited under the US law. Try to open a site on childpornography.com that violates the law and it will be closed. .ly prohibits certain things and running an adult site is one of them. NIC.LY's stand was pretty clear from the very begining: no adult content on .ly. It is like no child pornography on .com.
To conculde the day, no porno on .ly. Try to register gay.ly - impossible. Back in 2008 a person who filed for this domain got his money promtly back and put it into a more successful .ly site used by millions these days.
Short link: http://name.ly/~2NZN$8Z