Purchased a blacklisted Iphone

I believe this means that the phone is stolen

you should return it and get your money back

There are no "options".

The device is unusable. It was reported lost or stolen or the original purchaser skipped out on their contractual obligations to the carrier.

As suggested, recycle it or turn it over to the police and go buy a phone you can use.

Recycle it. You'll never be able to use it.