This is not true at all. KYC is a huge issue in the crypto community and within this forum due to which gamblers complain literally everyday about it related to different sites and that is perfectly understandable.
We usually see complaints related to proof of address and source of funds verification. I have rarely seen complaints related to the normal identity verification process in Bitcointalk. I just checked the complaints related to Cloudbet on
Askgamblers, and couldn't find any complaints related to funds confiscation for the failure of KYC verification. Most of the forum members say that they don't like the KYC verification. But in reality, most of the gamblers complete the KYC verification when the casinos ask them to do it.
When you don't complete KYC verification when asked by a casino especially when they want to check if you are real or just random persons, this could make them delay your withdrawal and I've since such act in many aggressive casinos. Casinos most time claimed the verification is to ensure that gamblers are not involving themselves in illegal practices like money laundering or other similar crimes.
I have seen some complaints here and I hope many of these would be resolved by the casino team if they are actually true.