AWS cooling failure knocks Coinbase offline for two hours, locking traders out during active markets

A cooling failure at an Amazon Web Services data centre in Northern Virginia knocked Coinbase offline for more than two hours on Friday, forcing the exchange to suspend trading and leaving thousands of users unable to manage positions during active market conditions.

The incident which comes a few days after Coinbase cuts over 700 jobs due to AI-native teams pivot, affected Coinbase’s web and mobile services globally and forced the exchange to temporarily place markets into “cancel only” mode as engineers worked to stabilize operations.

The AWS outage originated from infrastructure problems tied to overheating at one of Amazon’s major data centers in the US-EAST-1 region. According to Amazon Web Services, a power loss triggered cooling failures that impaired hardware operations and impacted services relying on the affected availability zone.

The disruption quickly spilled into crypto markets, where even brief exchange downtime can carry financial consequences for traders attempting to manage volatile positions.

How the AWS outage affected Coinbase users

Coinbase first acknowledged the AWS outage after users began reporting problems accessing accounts, executing trades, and processing transactions on Friday morning. The exchange later confirmed that some customers were experiencing “degraded performance” while others could not transact entirely.

In a public update, Coinbase stated that its teams were actively investigating the issue and attempting to restore functionality.

“We will begin the process to re-enable trading on our markets shortly,” Coinbase said in a support statement. “All markets would be placed in ‘Cancel Only’ mode before we move to re-enable trading.”

The AWS outage affected both retail and institutional users. Social media platforms were flooded with complaints from traders who said they were unable to manage open positions during active market conditions.

For crypto traders, interruptions of this kind can create significant risks. Delayed access may prevent users from executing stop-loss orders, entering positions during price swings, or withdrawing funds during periods of heightened volatility.

Coinbase also reassured users that customer assets remained secure throughout the disruption.

“The outage has led to some Coinbase customers being unable to transact on the web and mobile,” the company said. “Customer funds are safe.”

Amazon explains the AWS outage in Virginia

Amazon Web Services later confirmed that the AWS outage stemmed from rising temperatures inside a Northern Virginia data center tied to the US-EAST-1 Region, one of the company’s busiest cloud infrastructure hubs.

“We are observing early signs of recovery,” Amazon Web Services said in a status update issued at 5:11 a.m. UTC. “We continue to work towards restoring temperatures to normal levels and bring impacted racks back online in the affected Availability Zone.”

AWS added that it had already diverted traffic away from the impacted zone as part of recovery efforts.

Earlier updates from Amazon noted that the AWS outage was linked to a cooling system failure following a power disruption. The company said some services relying on affected hardware could continue experiencing impairments during restoration efforts.

The event also affected other online platforms beyond crypto. FanDuel, the American sports betting company, confirmed service disruptions connected to the same infrastructure incident.

The AWS outage once again highlighted how dependent major financial technology firms have become on centralized cloud providers such as Amazon Web Services.

Coinbase faces renewed scrutiny over infrastructure resilience

The latest AWS outage revived long-standing concerns about Coinbase’s ability to maintain platform stability during periods of heavy activity or infrastructure stress.

During the 2021 cryptocurrency bull market, Coinbase faced repeated outages as trading demand surged, drawing criticism from users who argued the company had not invested aggressively enough in technical resilience.

This latest disruption arrived shortly after Coinbase reported strong first-quarter earnings for 2026. During its earnings call, the exchange revealed it had purchased $88 million worth of Bitcoin during the quarter.

Alesia Haas also confirmed during the earnings call that Coinbase’s agreement with stablecoin issuer Circle for USDC automatically renews every three years indefinitely.

The timing made the AWS outage particularly notable because it occurred during a period of renewed institutional interest in digital assets and growing reliance on stablecoin infrastructure.

Industry observers say the incident demonstrates how even decentralized financial markets continue to rely heavily on centralized backend infrastructure providers.

The AWS outage also raises broader operational questions for exchanges handling billions of dollars in daily transactions. While blockchain networks themselves may remain operational, access to trading platforms can still be interrupted if supporting cloud infrastructure fails.

As of publication, Coinbase had not released a formal post-mortem detailing the full impact of the AWS outage or confirming whether all services had been completely restored.