I keep telling people to stop trying to make a quick buck and be "loyal" but desi dimag is thas budhi, so kya hi karega koi.
The soup is Air India is tracking details to the traders and if they see any link, the account is getting suspended.
I don't have any further details but if you are legit and have only used for "real" family and yourself, you will get this reinstated very quickly and if it's taking time, bad news. It won't be coming back.
I have redeemed for family members who are my blood, this has been very smooth. The only time when it was suspended was when I booked for a flight with my mother but re-instated in under few hours.
Few additional pointers, Gold status, more than 30 flights with Air India mostly paid. Never redeemed it for any friend, just blood.
So far so good, I infact also redeemed booking for my own parents. Air India didn't cause any problem.
I can only think they have a very strong mechanism to catch the abuse and if you are legit, you will get the account back. Reach out to their Social Media team but if it was friends and a pattern, it's going to be a problem.
Things have gotten very very strict, I get atleast 3-4 messages everyday from people stating they booked for friends, flights are now cancelled and account suspended.