Coinbase (NASDAQ:COIN) Chief Executive Brian Armstrong said an overheating issue inside an Amazon Web Services (AWS) data center triggered the exchange outage that disrupted trading and withdrawals for users this week.
The disruption came during a turbulent stretch for Coinbase after the company reported weaker-than-expected quarterly results and announced plans to cut roughly 14% of its workforce as it pushes to become “lean, fast, and AI-native.”
This Is ‘Never Acceptable’
For hours, traders across crypto markets speculated about the cause of the outage as users reported problems accessing accounts, executing trades and moving funds.
Armstrong addressed the incident in a post on X on Friday.
“We experienced an outage at Coinbase last night, which is never acceptable,” he wrote.
According to Armstrong, the disruption began after multiple chillers failed inside an AWS facility, causing a room to overheat and impacting Coinbase systems.
While many Coinbase services were designed to handle failures within a single AWS Availability Zone, Armstrong said the company’s centralized exchange architecture was more exposed because of the way trading platforms are optimized.
“Exchanges have unique architectures that optimize …
