Ask HN: Can a registrar withdraw or withold a domain because it is premium?

This is an unusual chain of events.

I get a special offer to register one of those new top level domains for free.

I do so. I find something that it said was available, and register it. I am rather surprised because I would have thought someone would have already taken it.

I get an email receipt (for $0.00)

I get an email confirming the domain purchase was successful.

I try to connect the domain to a server, hosting provider's web site was not behaving so I contact support.

Support says that domain was not part of the special offer and is a premium domain.

Domain is switched to not active.

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Have registrars the right to become cyber-squatters themselves now? Are they allowed to put individual prices onto each domain name?