VPN withdrawal confiscations

I don't get why sites act like this is some shocking scam when they were happy to take the deposits the entire time. If i'm on a vpn and they let me play, bonus, wager, lose, win... do I just have zero rights once I cash out? Is this on the player only, or on them for not blocking it up front?

What annoys me is they only seem to notice on withdrawal, when there's $1,200 sitting there. Do I have to assume any balance is fake until kyc and withdrawal are cleared? Is this standard in crypto casinos or just them picking the worst possible moment

Edit: i'm talking about cases where the account wasn't blocked before play started