Coinbase and Robinhood were among several major platforms affected by Amazon Web Services (AWS) data center outages on Monday, highlighting the risks of relying on centralized cloud providers for critical financial infrastructure.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) by trading volume, suffered an AWS data center outage, reporting “increased error rates and latency” across multiple AWS services in the Northern Virginia region.
“We can confirm that global services and functionality dependent on US-EAST-1 have also been restored. We continue to work towards a full resolution and will provide updates as we have more information to share,” AWS said in an update on Monday, about three hours after the outage was first reported.
The AWS disruption caused Coinbase’s mobile application to crash, with multiple users reporting problems logging in, placing orders, and withdrawing funds. The Base app was also suspended.
“Some users are now able to access and use Coinbase services, and we are seeing early signs of recovery,” Coinbase wrote in a Monday post, adding that “our team remains working on this issue as a top priority.”
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While other crypto exchanges have not reported any outages, multiple users of stock trading platform Robinhood have also reported delays in trade execution and issues with the application programming interface (API).
“Amazon is down, Robinhood is down, Reddit is down, McDonald’s is down, Fortnite is down,” Kussey, a crypto trader, wrote in a post on Monday X.
The crash comes six months after a previous AWS outage affected trading services on at least eight crypto exchanges, including Binance, KuCoin, MEXC Coinstore, Gate.io, DeBank, Rabby Wallet, and Weex, Cointelegraph reported in April.
Amazon cited “connectivity issues” as the reason for the April outage, which affected at least 12 services.
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Amazon AWS outage highlights the need for distributed cloud infrastructure
AWS provides cloud infrastructure for centralized exchanges that can process high volumes of transactions with low latency for trading orders. Used by some of the biggest exchanges including Binance, Coinbase, BitMEX, Huobi, Crypto.com, and Kraken.
This failure renews the need to develop decentralized alternatives that eliminate single points of failure.
Layer 1 Blockchain Vanar Chain has been building a blockchain-based cloud infrastructure with the aim of reducing this dependency. Two weeks after the April AWS outage, Vanar launched Neutron, an AI-native blockchain layer that provides data compression ratios of up to 500:1. According to Vanar CEO Jawad Ashraf, the system will allow users to store files completely on-chain without relying on a third party.
“This opens up entirely new possibilities. You can not only store files completely on-chain without relying on a third party, but even query and verify the actual information within the files,” Ashraf told Cointelegraph.
Internet Computer Protocol is another blockchain-based alternative that provides distributed computing, storage, and hosting across global nodes. Other Web3-based infrastructure providers include Filecoin for data storage, Akash Network for distributed computing, and Render Network for GPU-based computing services.
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