Coinbase has restored trading services after a major outage disrupted activity across its platform and forced several markets into temporary “Cancel Only” and auction modes.
The incident began late Thursday after users reported issues accessing trading functions on both web and mobile platforms. Coinbase Support later confirmed on X that customers were experiencing degraded performance tied to a wider outage affecting Amazon Web Services infrastructure.
We are aware that customers may be experiencing degraded performance at this time due to an AWS outage.
Our team is investigating this issue and will provide an update. Your funds are safe.
— Coinbase Support (@CoinbaseSupport) May 8, 2026
AWS infrastructure issue disrupts Coinbase operations
According to Coinbase’s status updates, the disruption initially affected transactions on the ALEO and Solana networks, with users experiencing delays in sends and receives beginning around 21:00 ET on May 7. Despite the interruption, the exchange said buys, sells, and fiat deposits and withdrawals continued operating normally during the early stages of the outage.
As the issue escalated, Coinbase warned that some customers could become temporarily unable to transact entirely. The company later traced the problem to increased temperatures inside AWS Availability Zone use1-az4 within the US-EAST-1 region, a key infrastructure hub supporting online services.
To stabilize trading activity, Coinbase shifted all markets into “Cancel Only” mode, allowing users to cancel existing orders while blocking new market and limit orders from being placed.
Cybersecurity experts noted that user funds remained safe in cold wallets during the outage. However, they warned that users could not access or trade their assets during the “thermal event,” which may reduce trust in centralized exchanges and raise concerns about over-reliance on single cloud providers.
The incident has also revived discussions around “single point of failure” risks in crypto infrastructure. Experts say exchanges may need to reduce dependence on one service provider like AWS to avoid similar disruptions in the future.
Markets resume following auction-mode recovery process
The exchange later initiated an auction-mode recovery process designed to gradually restore market activity. During this phase, users could place limit orders and monitor indicative opening prices, though no immediate order matching occurred.
Coinbase explained that auction mode would remain active for at least 10 minutes before crossed orders were matched at a final opening price, helping reduce disorderly trading conditions during recovery.
Coinbase eventually confirmed that all markets had been fully restored and trading functions were operating normally again.
The disruption comes during a difficult period for the crypto exchange. Earlier this week, Coinbase announced plans to cut about 14% of its workforce as part of a broader restructuring effort focused on artificial intelligence tools and reducing operating costs amid weaker market conditions.
Coinbase shares fell 2.53% in pre-market trading on Friday following the outage and restructuring news.
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