It’s clear that Lavabit is going to be collateral damage in the Snowden case, regardless of the fact whether the email system was as secure as advertised or not.
Levison was held in contempt of court and fined $5,000 for every day he did not turn over the keys after the FBI installed a monitoring device on his servers. Without the keys in a “usable electronic format,” the FBI could not read any of the data it was collecting.
Levison waited two days, racking up $10,000 in sanctions, then turned over the keys and immediately shut down his company. He’s appealing the fine now, arguing that requesting a master set of encryption keys was excessive if the FBI only wanted to monitor one user.