Throwing some possibilities out here:

(1.) They are thieves.
(2.) Government interference.
(3.) Blatant Incompetence.

To some degree combinations of the above (3) may be possible. At this point, I'm not sure that it couldn't be any of the (3) above.

(1.) If this is exclusively the case, what is their escape plan & when? - they would have to escape the country to avoid prosecution.

(2.) There may be a large, underlining investigation that we don't know about going on. Unfortunately the implementation of restrictions & barriers makes Bittrex liable, and thus the (potential) involvement behind it.

(3.) A "laughable" level of incompetence has been on display for a while now. So much so, that it reeks of reckless ego & lends to discrediting any government involvement conspiracy. Regardless of (1.) or (2.) - there is no disputing # (3.) - They may attempt to blame their verification provider Jumio, who has a bit of a tainted past. They could blame Jumio while claiming they had no choice but to abruptly implement KYC policies. That might be their only legal "escape" - However I do not see that getting them entirely off the hook. This could spend years in court. Someone at the helm thinks they are are smarter than everyone.