I'll confess, I hadn't looked into my assumption further until now. Details of the US sanctions against Libya can be found here (look for the Executive Order 13566 PDF):
The .ly registrar Libyan Spider has been fairly communicative and open with its customers. Their CEO Hadi Naser says they are a 'private company run by ordinary citizens that have no affiliation with the government' and that 'purchasing the .ly domains supports Libyan citizens, not the government'. A 10 percent fee goes to a nongovernmental organization in Libya that mantains the .ly network:
There was some prior disruption of service when Softlayer, their ISP outside of Libya raised some sanction related concerns, but that appears to have been resolved later:
http://www.treasury.gov/resource-center/sanctions/Programs/p...
The .ly registrar Libyan Spider has been fairly communicative and open with its customers. Their CEO Hadi Naser says they are a 'private company run by ordinary citizens that have no affiliation with the government' and that 'purchasing the .ly domains supports Libyan citizens, not the government'. A 10 percent fee goes to a nongovernmental organization in Libya that mantains the .ly network:
http://www.businessinsider.com/ly-registrar-our-servers-have... http://www.washingtonpost.com/lifestyle/style/the-libyan-con...
There was some prior disruption of service when Softlayer, their ISP outside of Libya raised some sanction related concerns, but that appears to have been resolved later:
http://libyanspider.com/m/announcements.php?id=20