Coinbase, the crypto trading platform, experienced a five-hour service disruption on May 8 after an AWS outage caused by data center overheating in Northern Virginia. The outage started at 5:25 PM PDT on May 7 when Amazon Web Services detected problems at one of its data centers in the US-EAST-1 region. AWS reported that overheating in the facility triggered a power loss, damaging servers and storage systems in affected equipment racks.
For Coinbase users, there were complaints of them being locked out of their accounts and being unable to purchase, sell, or trade crypto assets while the markets were operational.
Coinbase had disclosed its first-quarter 2026 earnings just a few hours before the shutdown, revealing that it had made a loss of $394 million, with revenues of $1.4 billion, representing a 31% fall compared to the same quarter in the previous year.
The earnings announcement came two days after CEO Brian Armstrong revealed a 14% workforce reduction affecting roughly 700 employees on May 5. Armstrong framed the cuts as part of a shift toward an AI-focused operating model. The company expects to record $50 to $60 million in restructuring charges for employee severance.
Dennis Da-ala Mirilla
What Happened During the 5-Hour Coinbase Outage
As the AWS outage spread, Coinbase moved its markets into "Cancel Only" mode. In this mode, users could remove existing orders but the exchange blocked all new buy and sell orders. It is a common procedure to help exchanges balance their systems in preparation for trading resumption.
After that, the exchange moved into auction mode, where users can put orders without being executed instantly. Rather, a calculation of the opening rate takes place and all orders are executed only after a certain amount of time.
During the entire outage, Coinbase posted on its status page that customer funds remained safe and directed users to the AWS dashboard for technical updates. The company confirmed that while trading was down, all cryptocurrency and cash balances remained secure in customer accounts.
The exchange also reported that transactions on the Solana and ALEO networks faced delays, though regular deposit and withdrawal services using traditional bank accounts remained operational throughout the disruption.
AWS Recovery Status and Timeline
AWS reported at 10:11 PDT on May 8 that engineers were "able to get additional cooling system capacity online, which has allowed us to recover some affected racks." The company stated teams were "actively working to recover additional racks in a controlled and safe manner" to prevent further equipment damage.
Multiple reports confirmed the outage lasted more than five hours before Coinbase began restoring trading services. The incident affected the same US-EAST-1 region that experienced a major outage in October 2025, when technical failures at AWS took down Coinbase, Robinhood, and multiple other major platforms simultaneously for several hours.
This marks the second major AWS-related outage for Coinbase in the past seven months.
Oluwajeminipe Fasheun-Motesho
