Baskett was declared ineligible Tuesday after she gave a fan permission to wear a T-shirt with a photo of her at the upcoming NCAA Championships.
Unbeknownst to Baskett, the fan started selling shirts, mouse pads and bags with her photo and name on them through a Web site.
The NCAA doesn't allow the sale of student-athletes' names, pictures or likeness, so the university had no choice but to declare her ineligible and report the violation. Baskett, one of Utah's top gymnasts, was reinstated Wednesday.
"She didn't think it was any big deal," Utah coach Greg Marsden said. "Luckily it happened early enough that we could get it taken care of."
Baskett said she was in "a state of panic," during the 24-hour period when she was ineligible.
"Everyone kept telling me I was going to be OK, but at that point, I was just so anxious," she said. "There are so many things you have to be careful of."
Utah sent a cease and desist letter to the company, and the Web site was taken down by Wednesday mid-morning.
Doug Archie, Utah's associate athletic director over compliance, said the university has to file three to four letters a year with companies asking them to stop selling their athletes' image.
If the athlete has no previous knowledge of the merchandise, the NCAA only requires the school to file a letter and doesn't have to declare the athlete ineligible.
"In Kristina's case, it was borderline what knowledge she had," Archie said. "We wanted to be pro-active so we could get it taken care of."