Increasing severity of punishment has already been proven not to work as a deterrent for physical crimes and it works even less for virtual ones. Carpet banning the populous even with a measure of accounting for certain factors only helps in antagonizing your own player base towards you because the gold selling industry you're trying to combat with this will see this and have accounted for it as acceptable losses. While the actual players that end up getting caught in the crossfire will be devastated, often having sunk months into their characters.
You might staunch the bleeding with mass bans for a bit but unless these are followed up with meticulous reviewing of numerous innocents caught in the drag net - again at the cost of time and effort - will hurt the server more than the industry.
Particularly with the community at hand and the status that vanilla WoW has garnered, people will pay large sums of gold for BiS items, e.g. wands. And with AQ looming the amount of items with a sizable price tag is going to increase. Carpet banning transactions of over 500g (or some other arbitrary number) with no chance for appeal will do far more harm than good. And in light of recent bans, probably already has.
I've seen false bans on Nost lifted after being reviewed, and I can only hope that this will be case here. But I've not done my research on how the staff handles things here and who from the Nost GM team is involved, since I've been very much just enjoying playing the characters I thought lost again.