Coinbase and Robinhood were among several major platforms affected by an Amazon Web Services (AWS) data center outage on Monday, underscoring the risks of relying on centralized cloud providers for critical financial infrastructure.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) by trading volume, was hit by an AWS data center outage, which reported “increased error rates and latencies” for multiple AWS Services in the Northern Virginia region.
"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," wrote AWS in a Monday update, about three hours after the outage was first reported.
The AWS disruption crashed Coinbase’s mobile application, with multiple users reported issues with logging in, placing orders and withdrawing their funds. The Base app was also disrupted.
"We’re seeing early signs of recovery, with some users being able to access and use Coinbase services now," wrote Coinbase in a Monday X post, adding that the “team is still working on this issue with top priority.”
While no other crypto exchanges reported outages, multiple users on the stock trading platform Robinhood have also reported trading execution delays and Application Programming Interface (API) issues.
"Amazon down, Robinhood down, Reddit down, McDonald’s down, Fortnite down," wrote crypto trader Kushy in a Monday X post.
The crash comes six months after a previous AWS outage had impacted 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 behind April’s outage, which affected at least 12 of its services.
Amazon AWS Outage Highlights Need for Decentralized Cloud Infrastructure
AWS provides cloud infrastructure for centralized exchanges that can handle high transaction volumes with low latency in trading orders. It is used by some of the biggest exchanges, including Binance, Coinbase, BitMEX, Huobi, Crypto.com and Kraken.
The latest outage has renewed calls to develop decentralized alternatives that eliminate single points of failure.
Layer-1 blockchain Vanar Chain has been building blockchain-based cloud infrastructure aimed at reducing this reliance. Two weeks after the April AWS outage, Vanar launched Neutron, an AI-native blockchain layer offering data compression ratios of up to 500:1. The system allows users to store files fully on-chain without third-party dependence, according to 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 is 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.