Coinbase disruption tied to AWS outage draws criticism amid staff layoffs and Q1 losses

Coinbase (COIN) reported a multi-hour disruption to crypto trading on Thursday, which the Nasdaq-listed exchange attributed to an outage at Amazon Web Services. The incident drew criticism as Coinbase continues to grapple with declining trading activity, quarterly losses, and staff layoffs.

The crypto trading platform said users were unable to transact across web and mobile services after failures hit multiple AWS availability zones in the U.S. Eastern Region, located in Virginia.

“Coinbase experienced service disruptions due to increased temperatures in the affected AWS service,” the trading platform said in a status-page update. Trading was later restored after markets were briefly placed into a “cancel only” mode.

“This primary issue is now fully resolved – thank you for your patience,” said Coinbase on Friday in an X post, adding its team would investigate the incident. “Details may change as our investigation progresses and more information is received from AWS’s official retrospective, once published.”

In a separate statement on X, Coinbase said systems initially flagged “high error rates across multiple services,” and engineers traced the issue to failures in AWS infrastructure.

“Coinbase systems are designed to be resilient to a single zone outage,” the company said. “In this case, we observed failures impacting multiple AWS zones, which caused an extended outage of core trading services.”

However, the disruption drew criticism from software engineer Gergely Orosz, formerly at Uber and Skype, who has over 310,000 followers on X.

“Unfortunate optics for Coinbase to have an hours-long outage when customers could not trade, a few days after their CEO said how non-technical teams are shipping code to production,” Orosz wrote on Friday.

Coinbase has faced scrutiny in the past due to outages during periods of high market volatility and infrastructure stress. In 2020, Coinbase experienced a brief outage as the price of bitcoin crashed 10% from $9,500 to $8,100 in 30 minutes. Other U.S. exchanges, including Kraken, had reported all systems as operational during the same period. A week prior to that, Coinbase experienced a similar outage when bitcoin rallied 15% to $8,900.

For Coinbase, which, as of now, appears to be the only crypto exchange affected by the May 7, 2026, outage, the disruption comes at a time when the company is facing financial and operational challenges.

On Thursday, Coinbase shares fell more than 5% in after-hours trading after it reported weaker-than-expected Q1 2026 results as decreasing crypto prices affected trading activity, one of the firm’s main revenue streams. The company posted a loss of $1.49 per share, compared with analyst expectations for a $0.27 profit. Revenue came in at $1.41 billion, below estimates of $1.52 billion.

It also follows its May 5 decision to slash its workforce by 14% or roughly 660 employees in response to negative market conditions and AI challenges. CEO Brian Armstrong announced the cuts in an X post on Tuesday, citing the “two forces” that converged in his firm’s decision to slash staff.