He's afraid that you've tricked someone else into sending the money by promising to sell them something. It's a very common way to scam people.
That is a method I was not aware of! I wish someone would produce a "common scamming methods manual" so we can familiarise ourselves with all these!
I know kyc does not work because if it did there would be no scams in the fiat world. I do not think it will work in btc but I have avoided exchanges and this is my first problem in lbtc. For example I fail to see a photo of a bank card proves anything other than I have the card in my possession, stolen,borrowed or otherwise? I fail to see ID being linked to any bank a/c since the only relevant similarity would be the name (I have real name verification on the site). But I share my initial and surname with my son and at least one famous actor+ hundreds more people. I rely more on trust rating but the seller obviously does not?. I do not pretend to know what the answer to scammers is but I know kyc is not the answer.