Please understand that thieving or scamming isn't illegal and therefore I can neither punish the other player nor compensate you for your lost ***** Coins.

It sounds like their customer service's position is that all of the conduct took place in the game and that the in game conduct of the other player wasn't the kind of rule violation that would justify returning the assets.

Games can have rules that differ from real life even if they have real life consequences. And games can have limited and specified consequences even to in game conduct that violates the rules.

American football does not allow a defender to interfere with a receiver's attempt to catch the ball. But the game also specifies the precise consequences should that occur. For example, if the referees miss it, that's the end of it. There are no additional consequences for the defender or the defending team.

All the conduct you are talking about took place within the game. And none of the conduct was conduct that is so inherently wrongful, the game's rules can't determine its penalty because it only affected in game objects and doesn't fall into any recognized exception.

There are games where people buy and sell ships for real money and, in the game, pirates can steal ships.

You can disagree with them, of course, but it seems like the game's customer service is taking the position that while the conduct might be the in game equivalent of a "foul", the game's rules don't permit return of the in game objects as a remedy. They are saying you want to do the equivalent of suing a football player for getting away with interfering with a receiver because it caused you to lose a bet and the game's rules don't allow interfering with a receiver.

I think you would agree that if the game's rules explicitly allowed this and it was a game mechanic, it would not be actionable. Surely those games that have piracy in them don't make the player character pirates real world pirates who could be charged with piracy. Then I think you have to concede that it also means that it's the game's policies that determine the appropriate penalty.

No out of game conduct is involved here.

Please understand that thieving or scamming isn't illegal and therefore I can neither punish the other player nor compensate you for your lost ***** Coins.

It sounds like their customer service's position is that all of the conduct took place in the game and that the in game conduct of the other player wasn't the kind of rule violation that would justify returning the assets.

Games can have rules that differ from real life even if they have real life consequences. And games can have limited and specified consequences even to in game conduct that violates the rules.

American football does not allow a defender to interfere with a receiver's attempt to catch the ball. But the game also specifies the precise consequences should that occur. For example, if the referees miss it and the next play starts, that's the end of it. There are no additional consequences for the defender or the defending team.

All the conduct you are talking about took place within the game. And none of the conduct was conduct that is so inherently wrongful that the game's rules can't determine its penalty. It only affected in game objects and doesn't fall into any recognized exception.

There are games where people buy and sell ships for real money and, in the game, pirates can steal ships.

You can disagree with them, of course, but it seems like the game's customer service is taking the position that while the conduct might be the in game equivalent of a "foul", the game's rules don't permit return of the in game objects as a remedy. They are saying you want to do the equivalent of suing a football player for getting away with interfering with a receiver because it caused you to lose a bet and the game's rules don't allow interfering with a receiver.

I think you would agree that if the game's rules explicitly allowed this and it was a game mechanic, it would not be actionable. Surely those games that have piracy in them don't make the player character pirates real world pirates who could be charged with piracy. Then I think you have to concede that it also means that it's the game's policies that determine the appropriate penalty.

No out of game conduct is involved here. When you bought the in game currency, you agreed to let the game's mechanics control your possession of that currency.