Is it really that hard to release such withdrawal? I cant even say that the said behavior of its clients or user is a major violation or did broke their Terms.
It is when the exchange doesn't control the coins anymore.
It looks like MONA was 51% attacked last year and Livecoin lost considerable funds. They disabled the wallet indefinitely but allowed trading to continue. Over time, the exchange rate became completely disconnected from the market because Livecoin stopped paying withdrawals.
At best, they are trying to force this user to buy BTC on the market at very unfavorable exchange rates, because MONA is worthless on Livecoin now. At worst, they might be stealing his money outright, given that his account was disabled and he hasn't received any money back.