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What type of site is this?
And what are they asking for to avoid that?
What is their justification for demanding money?
Well, that is blackmail then. It isn't even dressed up as a legitimate demand.
You can make a report to the police about this. They can trace their location from their IP address although obviously if they are based abroad then they cannot be prosecuted.
There is no way of preventing them from taking this action. If they are UK based then I suppose you could seek an injunction but it would be my guess that they are based outside of the jurisdiction as usually these scams operate in that way.
Sorry if that is bad news.
Can I clarify anything for you?
I think that is probably true. They are just trying to get money from you. I think probably telling them you have reported them isn't a bad idea.