I think it's just part of some generic category of strict blocking used by the hosted service - there's a lot of other stuff blocked, we generally don't get reasons as users other than it being the corporate security posture. We are a business partner of many firms (some have high security due to their needs) so our company trends in that direction - maintaining compliance is a big deal, entire team(s) manage it at various levels.
Do you know the name of the service? Blocking .xyz names as a whole would cut your company's employees off from accessing sites like Engine.xyz, ABC.xyz, and Starship.xyz.