I had the same problem a few weeks ago. 4 days after it started happening, my host (hostgator) shut down my account for "phishing complaints". They scanned the site, found the files they were using, looked like:
public_html/gsarcade/avatars/a5d28f71da.gif: HG-PHPSHELL.Encoded.Fragment.AA.UNOFFICIAL
and removed them. Since then it's been smooth sailing. So do whatever you have to do to prevent them from registering.
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