The Great Karnack sees it now: A New Registry...opt in and paid for then verified.
It is known, in the domain business as a managed registry approach. The registrant has to prove some level of entitlement before getting the domain name. It works and it keeps the domain counts low and provides employment for entitlement checkers. Back in the days when .com domains were free, there was even an element of checking involved as registrants had to explain why they needed the domain name.
There was a high level of typo squatting during the time that ICANN facilitated Domain Tasting. However the economics of Domain Tasting changed when there was a limit on the numbers of domains that could be tasted for free. Typosquatting still exists but PPC operators and the PPC feeds that many of these sites use tend to be blacklisted or at least kept way down the search engine results by the search engines. This means that these typosquats have to rely on type-in traffic from users mistyping the website urls. However there's another angle here in that some users will use search engine pages to navigate the web and will type the URL they want into the search engine query form.