You did not answer my question. I really would like to know the best way to deal with an extortionist. Yes dpr had different issues sure. Im not defending him or genix.
Do you mean extortionist in general or extortionists in this particular instance?
SR had a pretty long history of vendors trying to extort money from their customers by threatening to release their information to law enforcement. Typically, the approach taken to that was "name and shame". The community would be made aware of the intimidation and the admins would demote/ban the vendor account.
From what I've been able to establish, FriendlyChemist was sketchy to start with. He apparently sold precursors and processes and there are reports on the forums that the processes he sold were flawed. In that respect, he hadn't been operating in good faith and that needs to be taken into account when considering what followed.
If someone whose background was not as sketchy as FriendlyChemist's had tried to extort money from DPR, one option might have been to give them a job. FriendlyChemist had supposedly hacked the computer of another vendor and found their customer list. Not retaining customer information was a cardinal rule of SR. It may well have been worth paying FriendlyChemist to hack the computers of vendors in order to establish who was putting their customers at risk by retaining customer information.
Unfortunately, DPR's enforcement of the "don't keep customer information" rule was inconsistent. In one case, he closed the account of a vendor who'd retained customer information but explicitly stated that they were welcome to open a new account - this inconsistency was probably motivated by greed (he likely wanted to continue receiving the commissions from their sales rather than having them go elsewhere).
In my opinion, if ruthlessness was warranted, it should have been deployed against vendors who retained customer information. If someone can hack your computer and obtain your customer list then
you are the one who has made those customers vulnerable to exposure - it's your mistake which is potentially life ruining for them. The hacker is merely an opportunist capitalising on your wrong-doing.
You should always consider all your options before reacting and one of the first questions DPR should have asked himself was "can I somehow use this to my advantage"? I believe that one of the reasons he did not was his belief that he'd successfully "eliminated" a previous threat to SR by having a former employee killed.
He should have packed up shop and walked away the moment that person was arrested, if only because the fact that deal went wrong clearly demonstrated that DPR's own judgement was flawed. Once you have evidence that your judgement is flawed, it's foolish to continue relying on it to operate a criminal enterprise.