Other than the broken tracking system, the biggest problem facing Pokemon Go is the systemic cheating popularized via GPS spoofing and bots. After boosting their accounts to otherwise impossible levels, these illegitimate accounts will camp out at gyms with overpowered Pokemon, making it impossible for "normal" Pokemon Go players to enjoy the game's only form of battling.
With trading on the way, Niantic Labs knew they needed to do something about the thousands of illegal accounts before these bot users started selling accounts and Pokemon. Earlier this morning, Niantic Labs quietly put up a form on how to appeal bans on Pokemon Go's webpage and added a captcha verification service to stop bot programs that automatically create new Pokemon Trainer's Club accounts. Then the complaints started coming from players receiving ban notices, permanent server errors, or problems catching Pokemon or using PokeStops, indicating a soft IP ban.
It's unclear how Niantic is sorting out the "cheat" accounts from legitimate players, but the popular theory is that Niantic is targeting accounts that "teleport" long distances in a short time period, which indicates GPS spoofing. They may also start sorting through their accounts to flag players who have reached abnormally high levels in a short time frame.
If you use a third party tracking app that uses a Pokemon Trainer's Club login, you might be affected by the ongoing ban wave. And if you're a GPS spoofer, you probably should stop doing that before your account gets flagged. However, this is a pretty welcome move for all of us Pokemon Go players that haven't been able to battle at gyms because they're filled with 3200 CP Dragonites owned by Level 39 players.