Shortly after the release of the Call of Duty 4: Multiplayer Beta an exploit was discovered that allowed players who weren't invited into the beta, to play the game through their account. This is how it worked (it has since been resolved): Person A has the beta and downloads it while logged in on their account on Person B's 360 using the token given to them by Infinity Ward, then Person A logs out of their account and Person B signs on, wala, you have yourself the COD4 beta.

Approximately 23,000 users used that exploit to get into the Beta, and all 23,000 users will find themselves locked out of their 360 for a full 24-hours, according to an e-mail sent to Kotaku.

There was an exploit (it's been resolved), in the Call of Duty 4 beta. The public beta had 100k valid participants who qualified and were provided special tokens which allowed them to download the COD4 beta from Marketplace. There was an exploit that enabled valid beta participants to sign in with their accounts on a different machine, use their beta token and download the beta. The beta was then fully functional for any LIVE profile on that 2 nd machine (even after the beta participant's account was removed). Approximately 23k consoles were used to take advantage of this exploit to illegitimately access the COD4 beta.
The exploit has been fixed to prevent any additional users from illegitimately accessing the COD4 beta.

The current POR is to issue a 24-hour console lockout that will prevent these 23k users from using their consoles to sign in to LIVE. These users will also receive a message in the dash with an explanation as to why their console has been locked out for 24 hours for violating the LIVE TOU and a warning that more severe actions may be taken if they attempt a similar action in the future (console could be banned permanently, etc.). Again, this is not a permanent console ban - It's more of a "slap on the wrist" and a warning to these 23k users who used this exploit.

It's only 24 hours, but it's ashame that people were banned for figuring out an exploit Microsoft should have prevented in the first place.

Update

On Major Nelson's blog he disconfirms these rumors, and says that Xbox "..did NOT ban tens of thousands of folks yesterday as some are reporting." But, says that some of the steps that people are taking may violate the Xbox Live Terms of Service, and will get you banned.

Careful folks.



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