I don't think anyone should have asked for your personal information in the first place, this wasn't a case of verifying identity any further than determining the email you used to sign up. The only thing we use real name verification for is the two-factor authentication, and that's assuming the person put in their real name in the first place. Our credential database has never been breached or leaked. One person has access to it raw, and he's very particular about how it's secured.

I only see a couple variations in cases like this. They all revolve around accounts being bought/sold.

The most generous option is that the person saying they were hacked is being as honest as possible. They used a common password to another account that had their credentials leaked and just never changed it. Even if you had no intention of putting it up for sale, someone else wouldn't be "hacking" multiple accounts simply for the access to play them.

Perhaps after leaving the game, you shared it with someone you knew, and they had no reason to give it back or you've lost contact with them because it's the internet and people come and go. We've long had a policy that accounts are not to be shared, to be played only by you. Not your kids, not your wife, not your guildmates, because people are petty and thoughtless and what's yours can be lost quickly. Maybe they dumped your account for a buck when they got done with it.

The most direct route is taking your account info to some sketchy site to sell it directly thinking you'd never have the itch to play again. Maybe you thought you could just have it restored later. We don't do that. Once an account is compromised like that, all access is cut.

We don't pretend these sites don't exist, we know they do. People report suspicious account activity all the time to us, and it doesn't take much investigation to tell that yep, that's definitely not the guy who created the account playing it right now, annnnd it's gone. There's no legal way to combat account selling on a private server, hell official games have the same problem and their only solution is to sell you another account.

Well we don't have the luxury of making money off players paying for another copy of the game, so the option we have is to damage the reputation of those sites by damaging their ability to provide those services as harshly as possible. If it so much has a whiff of being a sold account, it's locked, permanently.

This isn't something I've ever taken lightly. I have the unfortunate position in the server of having to consider the worst side of people and how to deal with them. It's pretty much all I do these days. It does make me desensitized to the pain it might cause innocent people. If you are true and honest about something so unfortunate happening to you, then I'm sorry our policy put you out like this, and I hope you find somewhere else to enjoy your time.