A neutral third party holds the buyer’s payment while the registry processes the transfer. The funds go to the seller only when an agreed event happens, normally the registry record showing the buyer as holder, and go back to the buyer if the transfer fails.

When should escrow release the funds?

When the public registry record shows the recipient as holder of the block, confirmed by a WHOIS or RDAP query. Releasing on submission of the request or on registry approval leaves the buyer paying for a transfer that can still fail.

Who pays the escrow fee?

It is negotiable and usually split or paid by the buyer. Brokers often include escrow in their commission. Agree it in the term sheet so it does not become a dispute at closing.

What happens to the money if the registry refuses the transfer?

The escrow agreement should return it to the buyer, minus any fees the parties agreed are non-refundable. Define a long-stop date as well, so funds do not sit in escrow indefinitely while a request is stuck.

Is escrow used for leases?

Rarely. A lease does not change the holder of record, so there is no registry event to release funds against. Leases are usually billed monthly or annually in advance, sometimes with a deposit.

IPv4 Escrow: How Payment Is Held During a Transfer

Reviewed by Lukas Brandt, Head of IPv4 brokerage

Escrow in an IPv4 transfer means a neutral party holds the buyer’s money until the registry has moved the block. It solves a timing problem: the seller does not want to start a transfer without proof of funds, and the buyer does not want to pay for a block that is still registered to someone else.

Why transfers need it

A transfer has a gap between commitment and completion. Contracts are signed on day one; the registry updates its record days or weeks later, after its own checks, which can still fail. Without escrow one side carries all of that risk:

Buyer pays first. The buyer depends on the seller completing the registry steps, and on the registry approving them.
Seller transfers first. The seller gives up the block and depends on the buyer paying afterwards.

Escrow moves the risk to a contract with a clear trigger. Neither side has to trust the other with the full amount.

How it works

Term sheet. The parties agree the price, the block, the escrow holder, who pays the escrow fee, the release trigger, and a long-stop date.
Escrow agreement. Buyer, seller, and escrow holder sign a three-way agreement. It repeats the release trigger word for word.
Funding. The buyer deposits the full price. The escrow holder confirms receipt to both sides.
Registry process. Only now does the seller file or co-file the transfer request. See the transfer process overview.
Release. When the trigger happens, both parties, or the party named in the agreement, instruct the escrow holder to pay out.
Refund path. If the registry refuses, or the long-stop date passes, the funds go back to the buyer under the agreed terms.

Choosing the release trigger

The trigger is the most important clause. Ambiguity here is where escrow disputes come from.

Trigger	Risk for the buyer	Risk for the seller	Verdict
Transfer request submitted	High: registry can still refuse	Low	Avoid
Registry approval email	Medium: fees, RSA, or a sanctions check can still block completion	Low	Avoid as the only trigger
Public registry record shows the recipient	Low	Low, if verified promptly	Use this
Block announced and reachable	Low	High: depends on buyer’s routing setup	Avoid

Write the trigger as something both sides can check independently, for example: “the RIPE Database inetnum object for 203.0.113.0/24 shows org: ORG-BUYER1-RIPE”. Then verification is one query:

whois -h whois.ripe.net 203.0.113.0/24 | grep -E '^(inetnum|org):'

Add a deadline for the release instruction, for example two business days after the record changes. Otherwise a slow buyer delays the seller’s payment for no reason.

Who holds the funds

Independent escrow service or law firm. Most neutral. Check that the agent can handle the currency and amount, and how long its own compliance checks take, since that adds to the timeline.
Broker-held escrow. Common, and usually built into the broker’s fee. Check whether funds are held in a segregated client account and who controls it.
Direct payment without escrow. Acceptable only between parties with an existing relationship, or for small amounts where the escrow fee is disproportionate. Even then, pay against the registry record, not before it.

Payment fraud to watch for

Payment diversion is the most common way an IPv4 deal loses money, and it targets the payment step, not the registry.

Changed bank details. An email, apparently from the seller, broker, or escrow agent, announces new account details just before funding. Confirm any change by phone, using a number you already had, never one from the email.
Lookalike domains. Compare the sender’s domain character by character against earlier correspondence.
Pressure to skip escrow. A seller who insists on prepayment because “another buyer is waiting” is the classic setup.

The wider set of fraud patterns, including forged authority and stolen blocks, is covered in transfer risks.

Block verification checklist — what to confirm before funding
Timelines by RIR — for setting a realistic long-stop date
Buying IPv4 with escrow and transfer support

Last updated on October 3, 2026

Documents by registry Timelines by RIR