- Coinbase services stayed down for more than two hours after an AWS data center failure.
- AWS confirmed overheating and power loss damaged hardware and disrupted cloud services.
- Coinbase said customer funds remained safe while engineers worked to restore functions.
Coinbase users lost access to trading services for more than two hours after a major Amazon Web Services outage hit one of the company’s core data center zones in Northern Virginia on May 7. The exchange confirmed that some users could not trade while others saw major delays and failed requests across the platform.
The Coinbase status page showed “degraded performance” across exchange services. The company later confirmed that the issue came from an AWS outage. Coinbase also told users that funds remained safe while engineers worked on recovery.
The AWS issue started after overheating problems inside the data center disrupted cooling systems. AWS said a power loss tied to the incident damaged some hardware and slowed recovery efforts.
The company shifted traffic away from the affected Availability Zone, but some services still faced outages and delays. An Availability Zone is a group of physical data centers that support cloud services inside one AWS region.
Coinbase depends heavily on AWS infrastructure for exchange operations, account systems, and backend processing. Once the cooling failure spread through the data center, Coinbase trading systems started to fail.
Coinbase’s AWS Dependence Came Back Into Focus
This is not the first time AWS problems have disrupted Coinbase services. Back in October 2025, a major outage in AWS’s US-EAST-1 region knocked several large internet platforms offline, including Coinbase, Reddit, Hulu, Snapchat, Amazon, EA, Max, and Xbox Network.
The earlier outage came from failures inside AWS DynamoDB systems. AWS reported “significant error rates” at the time, which broke backend systems used by many large platforms. Coinbase also assured users during that incident that customer funds were safe.
The latest outage again exposed how dependent major crypto exchanges remain on centralized cloud providers. Even though crypto markets operate around the clock, exchange infrastructure still relies on traditional cloud networks. When AWS services fail, trading systems, login systems, and account functions can stop within minutes.
Brian Armstrong Pushes Coinbase Toward AI-First Operations
The outage also came during a major internal transition inside Coinbase. CEO Brian Armstrong has been restructuring the company around AI tools and smaller operating teams.
Coinbase recently cut 14% of its workforce, affecting nearly 700 employees based on the company’s last public employee count. Armstrong said the cuts were partly tied to weak crypto market conditions, but he also described the move as a long-term rebuild around AI-driven operations.
The company has started removing what Armstrong called “pure managers.” Coinbase now wants “player-coaches,” managers who also work directly on products and engineering tasks. The company is also building “AI-native pods,” including small teams that use AI agents to handle engineering, design, and product management work.
Related: Coinbase Faces Lawsuit Over Frozen DAI Linked to $55M Theft
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