She's been accused of a crime. Yes, she was arrested and had to bail out. This is normal process. How else does anyone propose this work?
This may be enough to open an investigation and start gathering more evidence, but doesn't satisfy probable cause. The cops and court screwed up.
A database match is not enough to confirm that this specific person (may have) committed the crime.
It would be like sending a ransom note asking the money be sent to Joe Smith, 123 Fake St. That doesn't really tell you anything about Joe Smith's connection to the crime. It's completely incidental.
Again in the article the defense is saying the prosecution is demanding the lady prove her innocence, which is something cops love to do.
And because this is a technical crime the fact there is almost no evidence isn't going to save you in a court of law, especially in the 4th least educated state. It's not about the law any longer, but the stories the lawyers weave.
But as to basic situation, the fundamental problem is that there is no expectation of justice at the end of this.
There isn't really a way around the police (and judges who approve warrants etc) just doing their thing and you having to comply. But if it turns out they were wrong, then they should always be on the hook for all the damage they've caused - the same as every other member of society. In this case, every day the victim was held in jail, her costs of having to hire attorneys and private investigators to represent her, plus simply the distress of having this hanging over her head while being threatened with years in prison.
The article implies this has already been going on for six months. While this isn't a long time as far as the legal system goes (remember, day job), it's an eternity for someone on the receiving end of it. That should be well north of a million dollars for disrupting someone's life that long (especially over a frivolity!) - putting aside any abuse suffered in jail, direct reimbursement for expenses, etc. I want to say it should be more, but $5500/day seems in the correct neighborhood (a daily rate should be much higher for days you're actually in jail, but lower on days you're "free" but are still under attack).
This would create a strong disincentive for incompetent (or in this case, constructively malicious) action by police/prosecutors, as well as demonstrating to all citizens that the justice system actually tries to get correct answers rather than harming innocent people and then merely wiping their hands of it.
The payment for wrong prosecution would create a back pressure on the justice system which is currently only possible via media reporting, something generally only accessible to the powerful or otherwise sympathetic defendant. We'd need a category of dismissal which is "innocent", where a judge determines not only is the person "not guilty", but that actually, with proper investigation and application of thought, the prosecution could have determined innocence beforehand themselves. This should come with the payment and automatic complete expungement of all records, and an entry in the local newspaper of the declared innocence of the defendant.
Then the last piece of the puzzle would be outlawing police and prosecutor unions, and firing police and prosecutors who have poor records of sending "innocent" cases to trial. This would serve to create a pressure towards correct prosecution.
But the difficulty then becomes addressing the perverse incentive of "innocent" vs "not guilty" (I don't love your terms but I'm just reusing them), where a local judge is incentivized to declare merely "not guilty" to save the city money. While things are always going to come down to the frailty of human judgement, it seems like this might be a setup to "change things" while the status quo doesn't actually change.
I'd also still question why there really needs to be two separate categories. Most of the harm in this case is coming from elective overzealous actions by the police. If they had to pay for damages they caused to any "not guilty", then they'd work to reduce those damages (no extradition, lower/no bail, etc). For the case that I was on, the damages would seemingly be limited to one night at the police station, and attorney fees. And most of the cost of the attorney was only necessary due to the prosecution insisting on bringing a case it knew it wouldn't win. So if the defendant is truly "not guilty" (as we the jury quickly found), then why should the defendant be on the hook for those costs-as-punishment ?
Every part of this would be fine if the companies allowing fraudulent parties to use their platforms were prosecuted for mail fraud, or interstate commerce fraud. Put the executive in jail. It's really this simple. The moment executives have repercussions they change their actions. Make cashapp prove they did their due diligence.
This means nothing in reality. These days half the USA has their personal information stolen in a data breach every week.