This is so bizarre to me that I'm not sure if I understand it correctly. They soft lock him out of UW system which will get him expelled for having an idea for

This is so bizarre to me that I'm not sure if I understand it correctly. They soft lock him out of UW system which will get him expelled for having an idea for an app for trading spots in classes and implementing a demo with fake data and using the token they provided him with to download data that is public already? And then they try to blackmail him with a promise of restoring system access to do unpaid compelled work for them?