You mean that network where the operator tried to call in an hit on people? Look at how many Bitcoin networks have been hacked (the digital equivalent of using violence). And in real world black markets, (think mafia), violence is rife (even in areas where the underlying transactions aren't illegal).
That's beside the point. You stated without government the "framework of trade [will] break down". On the contrary, even after scandals and shutdown markets, new markets pop up and, incredibly, people continue to use them.
As for Bitcoin networks being hacked that is a red herring as we often hear of non-black market sites being hacked--even with the all mighty government protection.
Even with the black market, government provides a backdrop of expectations. Murderers are still prosecuted even if the murder happened in a black market trade. I'm talking about a situation where there is no disincentive to use force, e.g. a place like Somalia or rural Pakistan.
