Coinbase and Robinhood were among several major platforms affected by an outage at an Amazon Web Services (AWS) data center on Monday, highlighting the vulnerabilities of depending on centralized cloud providers for essential financial infrastructure.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) by trading volume, experienced issues due to the AWS data center outage, which noted “increased error rates and latencies” across multiple AWS Services in the Northern Virginia area.
This AWS disruption caused Coinbase’s mobile app to crash, with numerous users reporting difficulties logging in, placing orders, and withdrawing funds. The Base app faced similar disruptions.
“We can confirm global services and features that rely on US-EAST-1 have also recovered. We continue to work towards full resolution and will provide updates as we have more information to share,” AWS stated in a Monday update, roughly three hours after the outage was first reported.
“We’re seeing early signs of recovery, with some users being able to access and use Coinbase services now,” Coinbase reported in a Monday X post, adding that the “team is still working on this issue with top priority.”
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While no additional crypto exchanges reported outages, many users on the stock trading platform Robinhood also noted trading execution delays and Application Programming Interface (API) problems.
“Amazon down, Robinhood down, Reddit down, McDonald’s down, Fortnite down,” commented crypto trader Kushy in a Monday X post.
This incident comes six months after a prior AWS outage affected trading services on at least eight crypto exchanges, including Binance, KuCoin, MEXC Coinstore, Gate.io, DeBank, Rabby Wallet, and Weex, as reported by Cointelegraph in April.
Amazon attributed April’s outage to “connectivity issues,” impacting at least 12 of its services.
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Amazon AWS outage underscores need for decentralized cloud infrastructure
AWS supplies cloud infrastructure for centralized exchanges that can manage high transaction volumes with low latency in trading orders. It is utilized by major exchanges like Binance, Coinbase, BitMEX, Huobi, Crypto.com, and Kraken.
The recent outage has reignited discussions around the development of decentralized alternatives to mitigate single points of failure.
Layer-1 blockchain Vanar Chain is working on blockchain-based cloud infrastructure designed to lessen this dependence. Two weeks following the April AWS outage, Vanar introduced Neutron, an AI-native blockchain layer that provides data compression ratios of up to 500:1. This system enables users to store files entirely on-chain without reliance on third parties, as explained by Vanar CEO Jawad Ashraf.
“This unlocks entirely new possibilities: from simply storing a file fully on-chain without relying on third parties, to querying and verifying the actual information inside the file,” Ashraf told Cointelegraph.
The Internet Computer protocol represents another blockchain-based alternative, offering decentralized computing, storage, and hosting across global nodes. Other Web3-based infrastructure providers include Filecoin for data storage, Akash Network for decentralized computing, and Render Network for GPU-based compute services.
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