The second major AWS disruption this year highlights the risks of centralized cloud infrastructure for financial services.
A widespread Amazon Web Services (AWS) outage temporarily knocked Coinbase’s mobile app offline and disrupted Robinhood’s trading systems on Monday, reigniting concerns over the financial sector’s dependence on centralized cloud providers.
According to AWS service health reports, the issue originated from its Northern Virginia (US-EAST-1) region, where multiple services experienced “increased error rates and latency.” The incident caused Coinbase users to face login failures, delayed transactions, and withdrawal issues, while the platform’s Base network also saw partial disruptions.
“We’re seeing early signs of recovery, with some users being able to access and use Coinbase services now,” the exchange confirmed in an update on X. AWS later reported that global services linked to US-EAST-1 had recovered, about three hours after the first alerts.
Meanwhile, Robinhood traders reported execution delays and API failures, echoing a broader outage that affected several popular platforms. One trader wrote, “Amazon down, Robinhood down, Reddit down — feels like the internet just paused for a moment.”
This marks the second major AWS outage since April 2025, when “connectivity issues” interrupted trading on at least eight crypto exchanges, including Binance, KuCoin, and Gate.io.
The repeated incidents have renewed debate around the centralization of cloud infrastructure. AWS supports some of the world’s largest trading platforms due to its high transaction throughput and low-latency environment. However, such single points of failure expose global markets to sudden halts.
Industry experts say decentralized cloud networks could mitigate these vulnerabilities. Jawad Ashraf, CEO of Vanar Chain, noted, “Blockchain-based cloud systems can remove third-party dependence entirely, ensuring uptime even during global outages.”
Projects like Vanar’s Neutron, Filecoin, and Akash Network are developing Web3-based computing and storage solutions designed to handle data on-chain with greater resilience.
The AWS disruption underscores a growing industry need to diversify infrastructure and build fail-safe systems for digital finance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.