Praise be to Allaah.
If the matter is as you describe, then you did well by
shutting down the site and advising those who go to it, and we ask Allaah to
reward you with good.
The basic principle is that contracts of hiring or renting
are binding on both parties until the end of the specified time period, but
if it becomes clear that the renter is renting the service for haraam
purposes, then this makes it permissible for you to annul the contract.
As for the payment agreed upon for hosting web domains, you
are entitled to a portion of it commensurate with the period during which he
used the site, and you should return the rest to him.
We put this question to Shaykh Dr. Khaalid al-Mushayqih (may
Allaah preserve him) and he replied: Yes, if what he was doing was haraam,
then you should annul the contract, because Allaah says (interpretation of
“Help you one another in Al‑Birr and At‑Taqwa (virtue,
righteousness and piety); but do not help one another in sin and
As for the rent that he paid, he is entitled to a portion of
it, i.e., if he had used up half of it, he gets half back, and so on. End
And Allaah knows best.