I don't see that as blackmail
If the person decides he's going to report it to the police, I think it's generous of him to make his intentions known, to perhaps put the matter at rest before it goes any farther.
Saying you're going to make a report isn't a threat.
Here's a definition of blackmail
Blackmail is an act, often a crime, involving unjustified threats
to make a gain or cause loss to another unless a demand is met. It may be defined as coercion involving threats of physical harm, threat of criminal prosecution, or threats for the purposes of taking the person's money or property.