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.
Actually whatever RTP they did or did not advertise for those pirated games is meaningless. The servers they were run on were not under the control of Novomatic so they could have been doing anything on the back end. The games would not have been tested, audited, or provably fair, and in all likelihood were rigged against players. You think the crooks who pirate and reverse engineer these games take care to make sure everyone gets an absolutely fair game? So even if they said the RTP was the same as the genuine games, it would not be believable. And that is without even considering the intellectual property and licensing issues raised by using pirated and unauthorised games.
I've also found a number of shitty affiliate sites that are working with Betcoin that have outdated reviews claiming that Betcoin also offers Aristocrat games. They were also pirated because Aristocrat is a tightly regulated Australian company that doesn't offer its games to unlicensed casinos for BTC play.
Obviously Betcoin knows all this because they have quietly removed the games at some stage. They just forgot to clean up the evidence trail that shows that they were using them. When a company makes one small mistake you can look past it and forgive them but when they make this many mistakes of this magnitude, come on, you would have to be a fool to continue trusting them.
So it's safe to say that BEST CASE scenario, Betcoin is sloppy and has no regard for it's customers data, money, or safety.
Exactly, careless and incompetent at best. On the other hand someone not so generous could reasonably conclude that they are actively involved in ripping off their own customers.