Damn, that's an annoying case to be honest. You totally have the right to refuse and get a refund and still they are doing this? Just ridiculous.
Personally I have used cn several times, always without any problem, even with medium 4 digit $ amounts. Guess this really is selective scamming, as it has been said before. I wonder what they will say in case you did provide KYC. Would there be  different excuse?

One thing by the way, just for the future if you ever think about using cn again (hopefully you don't). If you use atomic wallet -> changenow for the the exchange you get a worse rate. If you open a changnow account directly you always get a much better one. But yeah, guess using it again might be out of question now.