The only reference I can find regarding KYC and withdrawals is here:
5.5.8 Your winnings from settled bets are credited to your account and may be withdrawn in accordance with our withdrawal policy and if required by us, upon provision of the below materials to our satisfaction:
* a copy of valid photographic identification (passport, driver's license)
* proof of address (recent utility bill)
* credit/debit card to our satisfaction
* photo of yourself containing proof of date and identification materials
ArchivedBut that seems related more to withdrawal of "winnings", as opposed to getting your BTC refunded because they've decided to lock your account until you complete KYC.
And I can't seem to find a "withdrawal policy" anywhere.
In addition, they have this listed in the FAQ:
If bitcoin is anonymous, do I still need to provide Cloudbet with personal information?
No, all you need to create an account and start betting is a valid email address.
ArchivedThe increasing number of episodes similar to this are an indication that sites and services really need to be a lot more upfront about their KYC requirements.

I understand sites are loath to do so because they're (rightfully) concerned that users will simply skip over them and move onto the next site that (supposedly) doesn't have KYC, but then you are opening yourself up to scam accusations when incidents like this occur.
If you are also from an area prohibited from betting on their site, they state you will lose your deposit and close your account.
Actually they don't... they say (twice) that they reserve the right to shut your account down and refund you money... but again, no mention of KYC
5.4.2. We reserve the right to close your account and to refund to you the Account Balance at our sole and absolute discretion and without any obligation to state a reason or give prior notice.
8.3. Cloudbet reserves the right to close your account and refund the balance of your account without further explanation. Subject to any provision of these Terms and Conditions to the contrary, outstanding bets will ordinarily be honored. Further, we retain the right to suspend the whole or any part of the service for any reason at our sole discretion and in such event we may but shall not be obliged to give you any notice, however, we shall endeavor to provide you with such notice as we deem practicable.
Personally, I think they should honour these T&Cs... and simply give the OP their funds back... and then seriously consider updating their T&Cs and FAQ.