Exchange security compromises more than just securing the tokens that are being traded. Exchanges have two main things to worry about: user funds and user data. However, both have many ways to be compromised, such as hacking the exchanges’ wallets, the absence of fallback mechanisms or thorough security measures, phishing or, as the following case study shows, through APIs.
“On Mar 7, UTC 14:58–14:59, within this 2 minute period, the VIA/BTC market experienced abnormal trading activity. Our automatic risk management system was triggered, and all withdrawals were halted immediately.”