Left you once for six months to be with her dealer. At the very least, someone that had no qualms supplying drugs to people.
Her sister stole cash from you, and her response is to take your child and threaten divorce if you didn’t behave. She takes out a restraining order, and goes on to have an affair with her new dealer (it’s irrelevant if it was EA or PA, but I find it strange a man hangs on for 2 years for a friend).
Then two years later she gives him oral, but still has some moral qualms about crossing a line... Friend – that’s like thinking that maybe stabbing someone for the seventh time might be "too much", but six stabs is OK...
Wanted to break it off with him so as to "not hurt you" – that is like saying "sorry" to the stabbing victim above.
Friend – It’s seldom that posters can make a statement and near-guarantee it’s reliability, but here goes:
If there is no serious change in both YOU (maybe especially you) and HER then you are doomed to the next affair, the next separation, the next restraining order, the next theft, the next time your daughter is placed in an environment where your wife’s friend or romantic partner makes some cash selling drugs...
So what change?
This might be a wild guess, but her sister stole cash for dope? Your wife has twice hooked up with men selling dope? I’m guessing substance abuse is an issue in her family.
So sobriety – like total 100%, AA, 12-Step, meeting-a-day-for-100-days sobriety.
No sobriety = no chance.
Once sober – and along with sobriety – she can work on her issues, and possibly become a safe partner.
At the same time – you need to be thinking about your daughter. Want her to have the same issues as her mom and aunt? Think its good for her to be with mom and dad, mom and "friend", mom and grandparents, mom and dad, mom and "friend", mom and grandparents...
How did she get a restraining order? Those aren’t just passed out like candy. What was if for? Do you have a past of domestic violence?
Start looking RIGHT NOW at how to best ensure you have a relevant role in your daughters future and that she won’t be raised to call that cool guy that does his business in the evenings and is at best a step ahead of the cops "dad".