Coinbase Outage Locks Users, Triggers Liquidations

Coinbase’s trading platform was inaccessible for more than five hours on May 8 after the company posted that increased temperatures in an Amazon Web Services US‑EAST‑1 availability zone (use1-az4) disrupted its services. The outage prevented many users from accessing accounts and temporarily placed all markets in ‘Cancel Only’ mode.

The disruption began when Coinbase reported degraded performance and at one point its main site went offline. Coinbase posted on its status page that it would ‘begin the process to re-enable trading on our markets shortly’ and that ‘All markets would be placed in “Cancel Only” mode’ before restoring trading functions. The exchange later allowed limited trading and reported that BTC trading resumed after roughly six hours of combined outages and degraded service.

Customers reported they could not close or sell positions and that some orders were only partially filled. Traders were unable to place stop‑loss orders or exit leveraged positions, which contributed to forced liquidations. Bitcoin fell to $79,333.53 during the outage. Tracking data show liquidations tied to the outage totaled about $366,830 in the hour immediately following the failure and roughly $823,780 over the prior four hours.

The incident reduced Coinbase’s activity for the day. The exchange lost more than 35% of its 24‑hour trading volume, recording about $1.2 billion in total activity; bitcoin accounted for over one‑third of that volume. Some users and automated systems observed price differences between Coinbase prices and those on other centralized exchanges during the outage.

Coinbase attributed the failure to overheating at a single AWS facility. Amazon has not publicly reported broader outages tied to the same hardware. Coinbase said restoring full service would likely be a staged process and would depend on factors outside its direct control. ‘Cancel Only’ mode allowed existing orders to be canceled but prevented new trades until markets were re‑enabled.

The outage occurred as Coinbase reports lower crypto sentiment and recent internal changes. The company recorded a $394 million net loss, missed earnings targets and announced a reduction of about 14% of its workforce. CEO Brian Armstrong wrote that the layoffs were part of a restructuring to reduce management layers and increase the use of artificial intelligence, and he noted some recent product code had been shipped by non‑technical teams.

As Coinbase worked to restore services, trading activity on other exchanges normalized and bitcoin’s price regained some ground. Coinbase’s status page warned that a phased return to full functionality could take additional time given reliance on external data center conditions.