Disclaimer: I'm not an expert in pirated games, so some of this post may be incorrect.Are you saying that Betcoin was directly scamming it's customers
This depends on what house edge/RTP they advertised. If they advertised the correct RTP that was actually in the game, they didn't directly scam any customers. Pirated games are known for having a lower RTP though, compared to the official one because the pirates can edit the code safely.
or that Betcoin was taken in by low rent scammers and allowed them access to it's customers?
This is a probable case. They saw an opportunity to get good games for a cheap price, and probably a higher cut (since the RTP was probably lower than it should be) so they decided to let the scammers access it's customers.