That's BS, can you tell what service/business is this? Looks like you need to make a scam accusation against them and provide proofs. Services who confiscated funds just because it was flagged by their system without fully using the service should not be tolerated, they could at least refund your money.
I also thought it was the gift card provider at first, but apparently, he's referring to Amazon. They locked his account after redeeming multiple gift cards.