I'm curious what exact betting behavior landed your account in this situation. The only thing that I could think of off the top of my head is that you must have been using some sort of martingale betting style to where at some point they felt the need to put a cap on how far you can take that strategy. Is it possible this or something like it is the reasoning behind your new limits? If it were me, I'd take the hint and make sure my funds were protected, but reaching out to them and seeing what they're willing to do for you or what explanation they have seems like it would also be a good idea.
Yes, that's the only scenario that I can think where a sportsbook might limit a player another scenario that I can imagine is the OP having multiple accounts or using multiple accounts from the same IP and instead of banning the account, they are just limiting it majorly. So that the usage of multiple account is curbed. It could also be that you've reached your betting limits without KYC and that you'll have to go through KYC(since you've mentioned that your betting amounts are large). Only after the user is approved, they will allow you to continue betting without limits.
It is very unlikely this is about having multiple accounts as if that was the case then most likely he would have been banned directly instead of being limited on the amount of money he can bet.
What is happening to him is something which is common at fiat casinos, which is that your account gets limited, basically a casino offers their services to recreational gamblers but professional gamblers are bad for their business, so instead of banning them they limit them, as such it is unlikely his account will ever be restored to its original state.
It’s true, multiple account is of the table here because bet limitation is not the punishment for committing that violation. I notice that the OP has same issue on multiple casino which means he is always in profit that’s why bookmaker limit the account on betting huge amount. I already saw this same scenario before which casino decrease the betting limit and worst ban the user on playing in the casino because he is not giving profit on the casino side. Casino has the right to do it if the user is hurting the business profitability.