This is true, a wake up call for all those who are earning by selling or buying links. This all those participating in Advertising Programs like Text-Link-Ads. This is an effort to stop buying Google Pagerank which is mainly based on incoming external links. The paid links reporting form is directly available in the dashboard of Google Sitemaps

How will Google punish?
A complete exclusion from Google´s SERPs is only one possible consequence of a spam report. Google might also choose to give a site a "yellow card" so that the site can not be found in the index for a short time. However, if a webmaster ignores this signal, then a "red card" with a longer-lasting effect might follow. So it's possible that Google is already aware of an issue and communicating with the webmaster about that issue, or that they have taken action other than a removal on a spam report.

Are you the first to be punished?
You can still send your Application for reconsideration

But you can still sell links by-

• Adding a rel="nofollow" attribute to the anchor tag
• Redirecting the links to an intermediate page that is blocked from search engines with a robots.txt file

But that purely violates the Terms and Conditions of Advertising Programs like Text-Links-ads and PayPerPost, so some difficult times ahead for those who are participating in such programs.

How can you be "extremely" safe?
Follow all their Webmaster Guidelines.

Remember, some signs were seen on sites like John chow dot com when their homepage was back listed from Google Web Search for some period.