The Graveyard virus occurred due to Borderlands 2's "Hardcore" mode, where if you die, you die permanently, and your save is erased. Unfortunately the mechanism that triggered Hardcore mode could be triggered remotely, which caused all sorts of issues as malicious hackers took advantage of the bug.
The issue only occurs on the XBox 360, and PC and PS3 users were unaffected. The update log on Gearbox's support website simply states:
Added security to prevent data loss tied to malicious violations of the Xbox Live Code of Conduct through an unsupported third-party program.
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