Thanks again chaps. I feel a bit of a muppet but kind of went along with it as this is all new to me. It just didn't seem right though especially when they wanted money from me. No harm done this time except for a few wasted hours but it's been an education. I can see how people could fall for this!
Much appreciated.
It's based on the common practise of payment processors and exchanges that require you to prove that you're the owner of a fiat account and send a small amount of money to them, usually something like 1EUR or 1 USD.
They had to make it worth their time so the amount is already significant at 200 USD and irreversible since it's Bitcoin.
Let's hope people won't make those scammers rich.