> How would you know that the activity was criminal before it has been judged in a court?

You don't!

That's where it all gets weird.

There is beyond a doubt a massive amount of illegal activity that flows through MasterCard transactions, but MasterCard can't reasonably detect all of it. But when there is a case like this where your dirty laundry is big public news, suddenly MC can't hide behind plausible deniability.

You can’t always know. That’s why places like PayPal are very heavy handed and over the top with fraud detection. It’s being proactive (whether for good or not).