On Thursday, Coinbase(COIN) encountered a multi-hour disruption in crypto trading services, which it attributed to an outage at Amazon Web Services. This incident has drawn criticism as Coinbase continues to deal with declining activity, financial losses, and workforce reductions.
The Nasdaq-listed exchange reported that users were unable to conduct transactions via web and mobile platforms due to failures across multiple AWS availability zones in the U.S. Eastern Region, located in Virginia. “Service disruptions at Coinbase occurred because of increased temperatures affecting the impacted AWS service,” the company stated on its status page. Trading was eventually reinstated after a brief period where markets were set to ‘cancel only’ mode.
“The main issue has been fully resolved – thank you for your patience,” Coinbase announced on Friday via an X post, adding that they would further investigate as more information becomes available from AWS’s official retrospective.
Coinbase also explained in another statement on X that initial system alerts indicated “high error rates across multiple services,” with engineers identifying failures within the AWS infrastructure. The company noted, “Our systems are built to withstand a single zone outage; however, this incident affected multiple zones, leading to an extended disruption of core trading services.”
The outage drew criticism from Gergely Orosz, a software engineer formerly at Uber and Skype, who has over 310,000 followers on X. “Poor optics for Coinbase to have an hours-long outage preventing trades, following recent remarks by their CEO about non-technical teams deploying code,” he wrote.
Coinbase has faced previous scrutiny due to outages during times of high market volatility and infrastructure stress. In 2020, the company experienced a brief outage when bitcoin’s price plummeted 10% from $9,500 to $8,100 in half an hour. Other U.S. exchanges like Kraken reported operational stability at that time. A similar outage occurred a week earlier when bitcoin surged by 15% to $8,900.
The recent disruption is particularly challenging for Coinbase as it appears to be the sole crypto exchange impacted on May 7, 2026. It coincides with financial and operational difficulties faced by the company. Following its Thursday trading update, Coinbase’s shares dropped over 5% in after-hours trading due to weaker-than-expected Q1 2026 results. The firm posted a loss of $1.49 per share against analyst expectations for a profit of $0.27, with revenues at $1.41 billion falling short of the $1.52 billion estimate.
This comes shortly after Coinbase announced on May 5 that it would cut its workforce by 14%, or approximately 660 employees, in response to negative market conditions and challenges from AI technologies. CEO Brian Armstrong disclosed these cuts via an X post, attributing them to “two forces” influencing the decision.