Coinbase stopped working for over seven hours on Thursday after hot air in an Amazon data center threw its cloud services into disarray.
The exchange’s users found themselves unable to buy or sell crypto, while order book prices displayed hundreds of dollars larger than rival exchanges Binance and Hyperliquid.
The cause? Coinbase blames “increased temperatures in the affected AWS service.”
Amazon Web Services (AWS), which is one of the largest providers of cloud infrastructure that keeps much of the internet ticking over, claims to have suffered from a “thermal event” in one of its data centers in Northern Virginia.
Read more: Blockchain ‘alternative’ to Amazon Web Services just another crypto scam
The increase in temperature apparently affected its cloud hosting hardware, leading to a loss of power.
AWS quickly got to work on a solution, and as of this morning said it was “actively working to bring additional cooling system capacity online, which will enable us to recover the remaining affected racks in a controlled and safe manner.”
Amazon notes that its data centers rely on evaporation cooling, a system that involves filters in its air conditioning units being “dampened” with water, cooling any hot air that comes in and evaporating the water in the process.
Microsoft uses a similar system to Amazon’s AWS cooling methods.Read more: Major crypto exchanges suffer complications after AWS outage
Whatever the fix was to the cooling system, it seems to have paid off as Coinbase noted in the last two hours that, “All markets have been re-enabled for trading on Coinbase Exchange.”
Before this, it said that it was working to re-enable trading and that it would have to place all markets “in ‘Cancel Only’ mode before we move to re-enable trading.”
After this, it moved the markets into “auction mode.”
AWS outage adds to Coinbase’s growing problems
The entire debacle adds to a pretty bad start to 2026 for Coinbase. It fired 14% of its staff last week, and suffered $394 million in losses during the first quarter of 2026.
Software engineer Gergely Orosz picked up on this, noting how the hours-long outage makes for “unfortunate optics for Coinbase… a few days after their CEO said how non-technical teams are shipping code to production.”
He said, “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,” adding that the whole thing is “terrible advertising.”
Crypto exchanges have already suffered outages related to AWS before in 2025, which caused Binance to suspend its withdrawals and caused issues for KuCoin, MEXC, and Rabby wallet.
In this case, data centers within the Singapore region had experienced a power loss, causing knock-on disruptions to firms reliant on AWS data centers within the area.
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Source: https://protos.com/hot-air-at-aws-causes-coinbase-outage/
