AWS Outage Cripples Coinbase for Over Seven Hours: Crypto Trading Halted

Coinbase, one of the world’s largest cryptocurrency exchanges, suffered a major outage on Thursday, May 8, 2026, leaving users unable to buy, sell, or trade digital assets for over seven hours. The disruption stemmed from a thermal event in an Amazon Web Services (AWS) data center located in Northern Virginia, which impacted the exchange’s cloud infrastructure.

Impact on Coinbase Users and Markets

During the outage, Coinbase users faced severe limitations, including:

• Inability to execute trades (buying or selling cryptocurrencies).
• Order book prices displaying discrepancies of hundreds of dollars compared to rival exchanges such as Binance and Hyperliquid.
• Markets initially placed in ‘Cancel Only’ mode before transitioning to auction mode.

Coinbase confirmed the recovery in a series of updates, stating:

"All markets have been re-enabled for trading on Coinbase Exchange."

AWS’s Response to the Thermal Event

AWS attributed the disruption to a ‘thermal event’ in its US-EAST-1 region, which affected cloud hosting hardware and led to a loss of power. In a statement, AWS Support explained:

"We are observing early signs of recovery. We continue to work towards restoring temperatures to normal levels and bring impacted racks back online in the affected Availability Zone in the US-EAST-1 Region."

AWS noted that its data centers rely on evaporation cooling systems, where filters in air conditioning units are dampened with water to cool incoming hot air. The company is actively working to deploy additional cooling capacity to safely recover the remaining affected racks.

Coinbase’s Growing Technical and Financial Struggles

The outage adds to a challenging start to 2026 for Coinbase, which has faced:

• A 14% workforce reduction announced last week.
• Reported $394 million in losses during Q1 2026.
• Criticism over its heavy dependency on AWS, as highlighted by software engineer Gergely Orosz.

Orosz commented on the incident, stating:

"This outage is because Coinbase seems to have a hard dependency on AWS, and when AWS (or a part of it) is down, so is Coinbase. This whole thing is terrible advertising, especially a few days after their CEO said how non-technical teams are shipping code to production."

Historical Context: AWS Outages and Crypto Exchange Disruptions

This is not the first time AWS outages have disrupted cryptocurrency exchanges. In 2025, a power loss in AWS data centers in the Singapore region caused:

• Binance to suspend withdrawals.
• Issues for exchanges like KuCoin, MEXC, and Rabby Wallet.

The recurring theme underscores the risks of centralized cloud infrastructure for critical financial services, particularly in the crypto sector.