The in-game Auction House was a feature of the PC version of Diablo III. The auction house allowed players to put items up for sale, bid and buyout. There were two versions of Diablo’s Auction house. One used gold as its currency and the other one used real-world money. Sales and purchases from RMAH (Real Money Auction House) could be funded by Blizzard Entertainment’s Battle.net account balance or a third-party e-commerce service such as PayPal, Skrill or just credit and debit cards. You basically had the freedom to choose if you wanted to spend gold or real money on an item.
The Auction house was first introduced as a means to combat the illegal (or gray area) RMT (Real Money Trading) gold and item trading. Basically, in Diablo III players would use their real money to gain an advantage. They would buy items, boosts and such, which would require time-investment, but since they paid real money, it would be done in minutes. This is against Blizzard Entertainment’s EULA and is a bannable offense.
How players made money from the auction house
Now, there were a handful of players who used this auction house to turn quite a profit. One of the players explained how he used this to his advantage and made over $130,000. The anonymous Diablo III player figured out that gold was a trivial thing to get a hold of when compared to items. Through botted accounts, he searched the auction house all day every day to look for valuable items that had been posted for fraction of their worth. He used this to buy very valuable items for ridiculously low prices and then flip them and sell them for much more. This is nothing illegal, apart from the botted accounts part. He is just one guy who knows how the economy works, and he exploited it. Buying items for under a dollar and selling them for $30-$200 and turning an absolutely huge profit is no easy task.
While it is true that Blizzard should have been removing these botted accounts, it’s likely that their decision to monitor the bots instead and develop better systems for detecting these accounts is the reason the auction house stayed up as long as it did.
In conclusion, there are just some players that exploit the game’s bugs to their own advantage and no one can prevent that from happening again.