Nah, it's very unlikely. If it was a competitor spreading bullshit, they'd just make up an outright lie (e.g. "I tried to withdraw 3 btc, so the admin just deleted my account and won't respond to my messages!") and turn it into a confusing mess.
I think most likely the person was playing and hit some really bad luck. Possibly crazy bad luck. When it happens to you, it's pretty hard to believe and it's pretty natural to think you're getting cheated. It's happened to me before, like martingaling and hit like 7 loses in a row. wtf? Stop and make some dust bets and everything looks normal, and continue and just get punished again. Fortunately I know enough about crypto and maths to be able to verify bets and check if I was unlucky or cheated, but I realize that very few people do so (or are able to).
So @zaketej I'd recommend sending a message to support (bustadice.com/support) and ask for help with how to verify your bets (although to robustly do so, you'll need to have recorded the server-seed-hash/your-client-seed before starting). It won't help get your money back, but it might give you some peace of mind knowing you weren't cheated.
(Disclaimer: I'm currently acting an auditor of bustadice, and can cryptographically verify the bet-results. However it's only really got decent guarantees for investors, for players they are much better off verifying their own bets. It's also only a useful service if you believe I'm independent from Daniel, which while true, I wouldn't blame anyone for doubting... But fortunately players can trustlessly verify their own bets )