Last month the Mega.co domain changed hands for a estimated $60,000 but contrary to a report yesterday, Dotcom's Mega were not the buyers. However, as controversy around the Mega.co domain purchase grows following its deliberate diversion to Mega's payments page, Mega CEO Vikram Kumar informs TorrentFreak that a switch to an Icelandic domain is possible in order for Mega to "better reflect its global operations."

Despite numerous distractions Mega.co.nz has gone from strength to strength since its launch 11 months ago.

The company currently has around five million users who between them have uploaded close to half a billion files. With a just-debuted iOS app already in hand, encrypted chat and email services are already penciled in for release next year.

As 2013 draws to a close, news from TheDomains.com yesterday stated that following a sale in November, Mega.co.nz had become the proud owner of Mega.co, a Colombian domain that reportedly changed hands for $60,000.

The domain was apparently purchased by cloud-hosting company JustCloud before being acquired by Mega. However, there are serious problems with the story.

TorrentFreak spoke with Dotcom who told us he had “no idea” about the acquisition of the domain and immediately expressed concerns that the .co TLD is under U.S. control. We then spoke to Mega CEO Vikram Kumar who categorically denied the claims.

“Mega Ltd. does not own this domain name and was not interested in bidding for it when it was put up for sale recently. We strongly recommend that people interested in MEGA only visit mega.co.nz directly,” he told us.

Kumar appears to be referring the fact that Mega.co currently diverts to Mega’s payment page and as such is attempting to pass itself off as a genuine Mega domain, which of course it is not. Only adding to the controversy are claims by Andrew Rosener of domains broker Media Options.

“For the record, Media Options had Mega.co under signed contract exclusive agreement at the time of this sale. We had been marketing the name aggressively and likely the buyer was made aware of the sale through our efforts,” Rosener explains.

“However, the seller/owner sold the domain out from under us behind our back and refuses to honor our contract with him. We are currently evaluating how to best handle this and recover our commission that we are due.”

So why are JustCloud (presuming they still own the domain and haven’t re-sold it) now diverting it to Mega’s payment page, even for Mega users that are already logged in? Thus far, JustCloud have not responded to our requests for comment.

Interestingly, while Mega aren’t the owners of Mega.co, they do have another backup domain, Mega.is. The domain is the property of a wholly-owned Mega subsidiary in Iceland and provides food for thought on Mega’s plans and future opportunities.

“Both the subsidiary and Mega.is provide future options for Mega,” Kumar informs TorrentFreak. “In particular, it is possible that Mega.is becomes MEGA’s primary domain

name to better reflect its global operations.”

Causing concern for Mega is New Zealand’s Telecommunications (Interception Capability

and Security) Bill which comes into force in a few months time and could require companies like Mega to put in place an interception capability for surveillance agencies.

“Mega will not allow any compromise whatsoever to its core service values of protecting the privacy of MEGA users or changing its encryption model (end-to-end encryption with user-controlled keys),” Kumar says.

While Mega is taking a “wait and see” approach, the company is prepared to take drastic action to thwart attempts at forcing it to monitor users.

“One such option is to stop offering MEGA services to New Zealanders and thereby remove itself from the scope of the new law. Services to everyone else will continue as usual,” Kumar says.

“However, at this stage, this option is purely theoretical as the law itself is a few months away, its actual impact unknown, and there are several other preferred options for Mega that are far less drastic than that.”

Kumar says that a switch to Mega.is a possibility whether the new law bites in New Zealand or not. In the meantime the message regarding Mega.co is simple – don’t use it.