US-based cryptocurrency exchange Coinbase announced that all markets have been reactivated after experiencing hours of disruption to trading services due to a technical outage originating from Amazon Web Services (AWS). During the outage, the exchange temporarily halted order matching and switched markets first to "Cancel Only" mode, then to auction mode. Users experienced difficulties trading via web and mobile applications, and transfer delays were observed on some networks.
Initially, Coinbase support stated that users might experience reduced performance due to an AWS outage. A later update indicated the problem was linked to a more widespread AWS outage. According to the company's live status page, the disruption initially affected the Solana and ALEO networks. As of 4:00 AM UTC+3 on May 8th, delays were experienced in sending and receiving transactions on these two networks. Coinbase stated that trading, deposits, and withdrawals were not affected on these networks during this period. However, the problem spread to a wider area in the following hours. Coinbase initially reported a "degraded performance" outage, stating that users might be unable to trade on web and mobile platforms.
The company explained that the disruption was caused by "increased temperatures" in the use1-az4 availability area in the US-EAST-1 region of AWS. A subsequent technical assessment by Coinbase indicated that systems were designed to withstand outages in a single AWS region. However, this incident affected multiple AWS regions, resulting in longer-term disruptions to core trading services. During the return to normalcy, the exchange initially put all markets into "Cancel Only" mode, allowing users to cancel existing open orders but not accepting new market or limit orders. Markets were then switched to auction mode, where users could place limit orders and track indicative opening prices. Order matching was suspended for at least 10 minutes. After the auction process concluded, overlapping orders were matched at the opening price. Coinbase Support has now announced that all markets are back open for trading on Coinbase Exchange. The company stated that the issue has been fully resolved, but that the technical team will be investigating the outage and details may change once AWS's official assessment is released.
The outage came at a time when Coinbase was under pressure both financially and operationally. The company recently decided to reduce its workforce by 14% due to weak market conditions and an AI-focused restructuring. This decision reportedly affected approximately 660 employees. Furthermore, Coinbase's first-quarter results fell short of expectations. The company reported a loss of $1.49 per share, while analyst expectations were for a profit of $0.27. Revenue remained at $1.41 billion, while market expectations were around $1.52 billion.
COIN shares fell after the outage
Coinbase shares also came under pressure after the outage. COIN shares fell 2.53% in pre-market trading on Friday. It was also reported that shares fell by more than 5% in after-hours trading following the company's announcement of weaker-than-expected financial results on Thursday.
