I didn't follow how the story turned out that closely. I think it was a schoolmate who did this. I kinda split up my answer because I think if a kid/minor is the offender, it's not yet too late to learn how to behave (hopefully). But blackmailing people with nudes is a bit more than the usual bullying and occasional fight between boys we did back in the day. I trust some judge has a look at the individual case and comes up with a proper punishment that factors this in.

What annoys me is the people who offer this service. Advertise for use-cases like this and probably deliberately didn't put any filters in place not even if it's pictures of minors. I think they should be charged, fined and ultimately that business case should be banned. I (anonymously) filed a complaint, after writing that comment in September. But they're still online as of today.

So in my opinion the kid should be taught a lesson and the company should pay for this and be closed for good.