Very unfortunate. Obviously cheating is a very serious issue, but in this case I feel like something is systematically wrong with your class if half of your students are cheating. Putting people in the position where cheating is such an alluring option is bad user experience. Evolve or die!
Please, let's keep the responsibility for this where it belongs- on those who actually cheated.
Without necessarily absolving the students of responsibility for their actions, I don't think it's unreasonable to say that rampant cheating represents a failure on the school's part.