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Sneaker Bot Trading Marketplace Platforms:

Legality, Authentication & 3rd Party Intermediary Status

Miami - July 20, 2020

1) Introduction: What is a (sneaker) bot?

A bot is a software application that performs certain tasks automatically through the Internet. This article will focus on sneaker bots which are taken herein as an example of bots. Sneaker bots are pieces of software that assist their human users with purchasing online newly released and extremely popular shoes (high demand sneaker releases) in such a fast way (within seconds of the actual time of release) that it almost seems like an automatic purchase. When using a sneaker bot, the consumer’s chances to secure the purchase of a pair of sneakers are significantly increased because the bot will be able to enter the required information to secure the order quicker than any non-assisted human. Those other consumers who are not assisted by a sneaker bot have literally no chance to compete with those bot-assisted consumers. Sneaker bots are sometimes sold online for up to $500 (USD) depending on their features. Software companies which develop and market these sneaker bots justify such high prices by the fact that users often are able to buy and resell the sneakers they successfully ordered thanks to the assistance of their sneaker bot.[1]

2) Are (sneaker) bots legal?

Using a sneaker bot in order to purchase a product online from any given website might constitute a violation of the terms of use of any such third party e-commerce website. However, this does not make the use of sneaker bots illegal. Except for the U.S. Better Online Ticket Sales Act of 2016 (actually non-enforced to date) which made it illegal to buy tickets with bots if the use of such bots meant evading security measures and violating purchasing rules established by the ticket issuer, it is not illegal in the U.S. to use shopping bots.[2] In Ontario, Canada, the Ticket Sales Act of 2017 imitated the U.S. by rendering the use of ‘scalper ticket bots’ illegal. In New South Wales, Australia, a 2018 amendment to the Fair Trading Act 1987 also made the use of ticket bots illegal. However these two enactments in Ontario and New South Wales do not apply to other shopping bots, including sneaker bots, which are not regulated.

3) Logical emergence of bot trading marketplace SaaS platforms

The exponential growth, over the last 15 years, of the retail e-commerce market size made it inevitable for third party (intermediary) bot trading marketplace platforms (e.g. or to emerge in order to structure and streamline the market for bot developers and/or owners (collectively the “Seller(s)”) on the one hand and consumers or bot resellers (collectively the “Buyer(s)”) on the other hand. Sneaker Bot Trading Marketplace Platforms provide Buyers and Sellers of sneaker bots with a Web-based marketplace Software-as-a-Service (SaaS) platform, embedded in their website, which enables Sellers and Buyers to trade a variety of bots. Typically, buyers may indicate in their bids on the marketplace platform the preferred bot specifications and features the buyers desire to have in the bot they want would like to purchase including for instance the bot’s price range, license key duration, renewal period, expiration date, embedded add-ons/plugins and specific capabilities. Then on that basis the platform tries to find a Seller’s bot (listed for sale on the platform) which matches buyer’s bid and preferred bot specifications,

4) Authentication of Bot API/License Key’s Ownership and Sellers’ ID

Upon registering a user account on the bot trading marketplace platform’s website, the Seller may be requested to provide the platform with Seller’s official bot API[3]/license key giving access to Seller’s authenticated bot repository account on Seller’s bot management and hosting platform. Such third party bot management and hosting platform is typically contractually required (by the bot trading marketplace platform) to be Discord. Indeed, to date, Discord is one of the largest, cleanest and most reputable bot repository management and hosting platform.[4]

Sellers may list their bots (if approved) on the bot trading marketplace platform’s website provided that Seller’s bots meet(s) certain requirements which may include the obligation for the Sellers to formally confirm that their sneaker bot API/license key has been previously validly used by a third party (e.g. software developer).

Moreover, in order for a Seller’s bot to be listed on the marketplace platform, Seller is required to first connect/add said bot to Seller’s Discord server (if not already done). Then, Seller must provide the bot trading marketplace platform with access to Seller’s Discord bot API/license key through the OAuth2.0 authorization protocol[5] that (i) gives a third party platform (e.g. a bot trading marketplace platform) restricted access to Seller’s bot repository on a Discord server, and therefore (ii) allows the bot trading marketplace platform to verify Seller’s:

(a) identity (as guaranteed by Discord thanks to its partner Stripe which acts as Discord’s identity verification provider), and

(b) ownership over the sneaker bot(s) which the Seller desires to trade on the platform.

The bot trading marketplace platform normally only allows the sale/purchase of bot license key which are ‘bound’ (i.e. activated) in order to ensure that the Seller is the actual legal owner of the bot at the time of the sale/purchase transaction on the marketplace platform.

Once approved the bot trading marketplace platform and listed on the online bot marketplace, Buyers may purchase the listed bots in a secure manner. Once a bot has been purchased by a Buyer, the bot trading marketplace platform to disconnects (by using the Seller’s Discord bot API/license key) the bot from Seller’s Discord account right after said bot has been sold on the marketplace platform. The bot trading marketplace platform must then immediately disclose the sneaker bot API/license key to the Buyer who may then connect the purchased bot to his/her/its Discord account. All keys, after purchase, are deactivated/unbound and reshuffled so that Buyer truly becomes the sole, exclusive and fully protected owner of the purchased bot.

5) Bot trading marketplace platform’s third party intermediary status

In order to protect themselves, bot trading marketplace platforms typically assert, in their website terms of service (ToS), their third party intermediary status to make it clear that they are not party in any way to the buy/sell transactions concluded on their marketplace platform between buyers and sellers. They merely facilitate such transactions by providing buyers and sellers with external payment method namely PayPal Checkout most of the time. Bot trading marketplace platforms hold buyer’s bid amount (transferred from payment service provider e.g. PayPal) in escrow. for and on behalf of the buyer. until they find a bot on their platform which matches buyer’s bid amount and preferred bot specifications.

Bot trading marketplace platforms make each buyer acknowledge and agree, in their ToS, that (i) any bot purchase/sale agreement shall be solely and exclusively entered into by and between buyer and seller, and (ii) all updates and technical support related to the bot(s) purchased by buyer on the bot trading marketplace platform shall be provided to buyer by seller only.

As a third party intermediary, the Bot trading marketplace platform collects a certain intermediary fee percentage of the total bot purchase/sale transaction amount. Typically, half of such intermediary fee is collected from the Buyer and the second half is collected from the Seller.

Lastly, the ToS usually include a disclaimer of warranties under which the Bot trading marketplace platform disclaims all warranties with regard to buyers’ use of bots purchased on the bot trading marketplace platform.

Dr. Ariel Humphrey

[1] Source:

[2] Source:

[3] Application Programming Interface.

[4] Sources: and

[5] The OAuth2.0 authorization protocol allows Discord registered users to share with third parties (such as a bot trading marketplace platform) access to such Discord registered users’ proprietary applications (e.g. sneaker bots) located on their Discord resource server without disclosing their credentials.