There is a lot of market manipulation on the crypto exchanges. Trading that would be illegal on regulated exchanges, like wash trading, happens all the time in crypto markets.

One (evil) purpose of a bot would be market manipulation. The bot developer releases a bot that generally makes money. The developer controls the bot, so they can view trades before they happen. This means that they can front run the trades. The bot users would, ideally, make money, but the developer would make nearly risk free trades.

If a bot developer did this in regulated markets, they would probably end up in jail. But crypto is the wild west, with little to no oversight.