Last night I went through the procedure of registering my account, creating a profile and even looked around at other users and shared projects.
I go to log in this morning and it prompts me for a user name. I enter the same one as last night and I get the 539 error message. I tried a different user name; same error.
The issue should solved now in version 1.0.23. The message is replaced by a more specific information.
Nevertheless, registering your Cubase 8.5 license at MySteinberg is (still) required.