On May 9, 1994, entrepreneur Gary Kremen (who also founded Match.com) registered sex.com with Network Solutions, but did not develop the site as he focused on growing Match.com.
On October 18, 1995, Network Solutions transferred, without permission, the domain to Stephen M. Cohen, who had been trying to gain control of the domain for some time by misrepresentation, using phone calls, e-mails and forged letters. He eventually persuaded an employee of Network Solutions to change the ownership details by submitting a fake fax. After gaining control of the domain, Cohen produced an advertising-heavy site that received up to 25 million hits a day. From payments for click-throughs and other advertising, Cohen was reportedly making $50,000 to $500,000 per month. Kremen undertook steps to recover the domain, while Cohen claimed he obtained the domain legally from Online Classifieds (OCI). A five-year legal battle ensued, led by cyberlawyer Charles Carreon.
Kremen was victorious in November 2000, when Network Solutions was ordered to return the domain to the plaintiff. According to the record of Kremen v. Cohen, Cohen was ordered to pay $25 million into court; in April 2001, the California District Court awarded Kremen an additional $40 million for lost earnings, for a total judgment of $65 million. Cohen appealed the judgment and refused to allow assessment of his business: he provided false information and declared most of his companies bankrupt while illegally moving assets out of US jurisdiction. When an arrest warrant was issued, Cohen fled to Mexico. Kremen offered a $50,000 reward for information, but Cohen remained at large while continuing to file appeals that were rejected. In October 2005, Cohen was arrested in Tijuana, Mexico for immigration violations, and was handed over to US authorities.
Kremen settled his lawsuit against Network Solutions for an undisclosed amount.
Cohen was released from custody on December 5, 2006, by Judge Ware.
Sex.com was reportedly sold to Escom LLC in January 2006. At a reported $14 million price, the domain name had widely been cited as the highest priced domain sale.
On February 18, 2010, the domain name was ordered to be sold at a foreclosure auction. On March 18, 2010, a day before the auction, creditors of Escom, LLC filed an involuntary Chapter 11 bankruptcy petition to prevent a possible loss of value by selling the name at foreclosure. At Mike Mann’s request the domain was brought to Sedo to be auctioned.
On October 20, 2010, Sedo reportedly completed the auction, filing in a California court that it had approved the sale for $13 million to a Clover Holdings LTD. A bankruptcy hearing was held on October 27, 2010 to determine if the sale was finalized and approved by all creditors. On November 18, 2010, Sedo confirmed the new sale price in a press release, and marked the previous sale at $11.5 million, negating the claimed $14 million buying price published in 2006.