The software giant claimed that putting a hold on new accounts for the next two months will help it limit the amount of copyright-protected content being uploaded to the site.
The move will also give the firm an opportunity to tweak the filtering software used to automatically find and remove illegal uploads.
Soapbox now requires users to login using their Windows Live ID before they can watch or upload videos.
Microsoft said that it will be "opening the doors again very soon with some cool new stuff to try".
"We were thrilled to be a part of these discussions from the start, and to share our vision for delivering easy access to great content for consumers while accommodating critical copyright and intellectual property protections," said Microsoft Platform and Services president Kevin Johnson.
"This partnership proves that we can do both and serves as a great foundation for future collaboration."
As well as manually removing copyrighted clips if notified by copyright holders, Microsoft will use Audible Magic's CopySense Network Appliance digital-fingerprinting technology to automatically find and block protected content.
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