This is how I think it works. If you got banned before they put in the report in game feature than thats different.
Basically they banned any blatant hackers, and gave all glitchers 1, I repeat, ONE, chance. If they had 2 pieces of proof against you, you would be demoted. 3 meant banned.
Now, every time the game crashes, it puts a debug and a .dmp file in your Nexon folder. This contains all information about the crash, and it sends it to nexon to look at. This info can contain
a] Which hacks were used
b] If it was your computer that crashed, not the client
c] Why it crashed
Nexon will then base the reports off of your account, the .dmp files, and the GM's ghosting in-game.
Ghosting means: A GameModerator ( or game master) invisibly WATCHING you play in 2 full games. The only way you can see this GM is with an Aimbot, or OPK, where you can see any headgear they are wearing.
I OPKed a GM in 1 game, about 5 days ago. I was INSTANTLY banned, on the spot.