23,000 Users Locked Out of Live Due to COD4 Exploit?

Edit: This situation has now be cleared up, you can read about it here.

It looks like up to 23,000 Xbox Live users could have their Live accounts locked out for 24 hours because of the Call of Duty 4 beta exploit. That is, if a leaked internal memo from Microsoft is correct. Xbox-Scene got sent what you can read below by an "internal Microsoft source". It makes for interesting reading and seems that besides being banned from the COD4 beta, they are also being locked out of Live for violating the terms of use!

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 2nd 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 [Terms of Use] 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.