[9] Lavabit was founded by Texas-based programmers who formed Nerdshack LLC (renamed Lavabit LLC the next year), citing privacy concerns about Gmail, Google's free, widely used email service, and their use of the content of users' email to generate advertisements and marketing data.

In August 2013, Lavabit had about 410,000 users and offered free and paid accounts with levels of storage ranging from 128 megabytes to 8 gigabytes.

[16] The day after Snowden revealed his identity, the United States federal government served a court order, dated June 10, 2013, and issued under 18 USC 2703(d), a 1994 amendment of the Stored Communications Act, asking for metadata on a customer who was unnamed.

On October 2, 2013, the Federal District Court in Alexandria, Virginia unsealed records in this case, but only censored the name and detail of the target of the search order.

[4] The court records show that the FBI sought Lavabit's Transport Layer Security (TLS/SSL) private key.

Lavabit was ordered to provide the SSL key in machine readable format by noon, August 5 or face a fine of $5000 per day.

[29][30] The court documents stated that on July 13 Levison sent an open letter to the assistant US attorney, offering to give email metadata (without email content, usernames or passwords) to the FBI if it paid him $2,000 "to cover the cost of the development time and equipment necessary to implement my solution" and $1,500 to give data "intermittently during the collection period".

He also wrote that in addition to being denied a hearing about the warrant to obtain Lavabit's user information, he was held in contempt of court.

He also wrote that "the government argued that, since the 'inspection' of the data was to be carried out by a machine, it was exempt from the normal search-and-seizure protections of the Fourth Amendment.

"[32] One year after the suspension of Lavabit, its founder Ladar Levison announced a specification for the Dark Internet Mail Environment (DIME) at DEF CON 22.

[36] As of July 2016, posts to the Dark Mail Alliance forum suggest that all collaborators have left the project and Ladar has been working on DIME alone.

The service has been revamped to use the Dark Internet Mail Environment protocols and software that Ladar had been working on for the past few years.