Praise be to Allah.
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 the meaning):
“Help you one another in Al‑Birr and At‑Taqwa (virtue, righteousness and piety); but do not help one another in sin and transgression”
[al-Maa’idah 5:2]
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 quote.
And Allaah knows best.
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