Of course it is blackmail. To top it off, if you pay a blackmailer, they will then try to extort even more money from you. Guaranteed. Do you really think that someone is going to take your $200 and use that money to move? Where to? A cardboard box? Their story isn't even believable.
Best possible advice is to completely ignore these blackmailers. Cut off all contact, period. Don't ever answer them, no matter what. They will harass you for a while, but as long as you never answer them no matter what, eventually go away and move on to their next mark because you aren't answering, you aren't paying, and they will eventually give up. If they contact your wife, you said you can handle it already, so there you are.
Play safer next time, seriously. Don't ever give out real personal info to anyone, use a throw away email address, use a throw away phone number, no info you give out should be real, everything in a cam session is easily recorded, so don't ever show your face, etc. That basically renders a cam site to be completely useless, for all practical purposes though, don't you think? I think so.
Cam websites are completely full of scams like this. I really think 99% of this is some kind of extortion scam anyway. Some cam websites have disclaimers all over the place to warn you about that. Best to never use them again. In the future, stick to porn and/or real hookers instead. That's my advice to you, moving forward. Cam sites are a blackmailer's paradise.