An example of an exploit would be the ability to see UN ID item stats in Diablo 3. Converting karma to gold uses no exploit to do so, no glitch, no weird button presses to make the system do something it isn't suppose to do.....the very idea that this is an exploit is a joke. No one should of been perma banned for this. Change it if thats not what you wanted devs but its your fault that you left that in the system there was no exploit done to do it.
People are using karma to buy the supplies to do their crafting. After they create excess products they dont want they are vendoring the junk for some money. Arenanet is against this and considers it exploiting the economy and banning users who do it. Keep in mind this isnt a ban for vendoring crafting materials, just crafting materials you obtained by buying them with karma.
"The unknown.. trolls us.." -Carl Sagan I play with balls and cubes -> http://www.youtube.com/CenaxKikia