Thats just wrong and spreading wrong fear.

You can keep the city domain in any country if not the country where the city is located. Nothing will happen. Domain owners should learn a lesson from Kentucky and Cuba cases. Your domains domains are not safe in the US!

[...] What Domainers Should (and Shouldn’t) Do Post Kentucky Here are some things for domainers to consider now that the Kentucky case has been overturned. The Kentucky Court of Appeals has overturned a trial court’s ruling that the state could seize domain names associated with online gambling. The Court of Appeals ruled that domain names weren’t “gambling devices”, which was part of the statute used to justify seizing the domains. As Michael Berkens pointed out, this is a narrow victory. Electronic Frontier Foundation writes that the ruling suggests to the Kentucky legislature that it can change the definition of “gambling device”, but it still believes the case will be without merit because “In addition to this type of domain name seizure still raising serious First Amendment, due process, and other constitutional problems, Kentucky courts (as pointed out in our joint amicus brief) also lack the authority to directly order out-of-state registrars to turn over customer domain names.” More… [...]