Coinbase and Robinhood were among several major platforms affected by Monday’s Amazon Web Services (AWS) data center outage, highlighting the risks of relying on centralized cloud service providers for critical financial infrastructure.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) by trading volume, has been hit by an AWS data center outage, reporting “increased error and latency rates” for multiple AWS services in the Northern Virginia region.
An AWS outage caused the Coinbase mobile app to crash, with many users reporting problems logging in, placing orders, and withdrawing funds. The Base app was also disrupted.
“We can confirm that global US-EAST-1-based services and features have also been restored. We are continuing to work towards full resolution and will provide updates as we have more information to share,” AWS wrote in a Monday update, about three hours after the outage was first reported.
“We are seeing early signs of recovery, with some users now able to access and use Coinbase services” – Coinbase he wrote in X’s Monday post, adding that “the team continues to work on this issue with the highest priority.”
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While no other cryptocurrency exchanges have reported outages, many users of stock trading platform Robinhood have also reported trade delays and application programming interface (API) issues.
“Amazon down, Robinhood down, Reddit down, McDonald’s down, Fortnite down,” wrote cryptocurrency trader Kushy on Monday post.
The outage comes six months after a previous AWS outage that affected trading services on at least eight cryptocurrency exchanges, including Binance, KuCoin, MEXC Coinstore, Gate.io, DeBank, Rabby Wallet and Weex, Cointelegraph reported in April.
Amazon cited “connectivity issues” as the cause of the April outage that affected at least 12 of its services.
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The Amazon AWS outage highlights the need for decentralized cloud infrastructure
AWS provides cloud infrastructure for centralized exchanges that can handle high trading volumes with low latency for trade orders. It is used by some of the largest exchanges including Binance, Coinbase, BitMEX, Huobi, Crypto.com and Kraken.
The latest outage has renewed calls for the development of decentralized alternatives that eliminate single points of failure.
Layer 1 Blockchain Vanar Chain is building a blockchain-based cloud infrastructure aimed at reducing this dependency. Two weeks after the April AWS outage, Vanar launched Neutron, an AI-powered native blockchain layer offering data compression ratios of up to 500:1. According to Vanar CEO Jawad Ashraf, the system allows users to store files entirely online without relying on third parties.
“This opens up completely new possibilities: from simply storing the file entirely on-chain without relying on third parties, to checking and verifying the actual information contained in the file,” Ashraf told Cointelegraph.
The Internet Computer Protocol is another blockchain-based alternative that offers decentralized processing, storage, and hosting on global nodes. Other Web3-based infrastructure providers include Filecoin for data storage, Akash Network for decentralized computing, and Render Network for GPU-based computing services.
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