AWS Outage Impact: Coinbase and Crypto Platforms Go Dark
Amazon Web Services experienced a massive outage on October 20, 2025, bringing down dozens of major platforms. Coinbase and Robinhood were among the crypto platforms affected when AWS reported network connectivity issues in its Northern Virginia data center. The disruption revealed a critical weakness in the crypto ecosystem’s infrastructure.
How AWS Outage Disrupted Coinbase Services
Coinbase acknowledged that many online services experienced issues during the AWS outage. Users found themselves locked out of their accounts during the early morning hours. The company confirmed all funds remained safe throughout the disruption.
The outage prevented users from accessing basic platform functions. Trading activities came to a halt as charts failed to load properly. Some users who managed to access their accounts discovered that withdrawal functions weren’t working. The incident left thousands of traders unable to execute time-sensitive transactions.
AWS reported problems stemming from a DNS resolution failure affecting DynamoDB, a core database service. DNS acts as the internet’s address book, translating website names into machine-readable IP addresses. When this system collapsed, applications couldn’t connect to essential databases.
Crypto Platforms and AWS Dependency
The US-EAST-1 region handles approximately 35-40% of all AWS traffic globally. This concentration created a domino effect across multiple industries. Robinhood also suffered service disruptions, confirming that third-party vendor issues impacted their platform.
Base, Coinbase’s Ethereum layer-2 network, reported that the AWS outage impacted its infrastructure and reduced its capacity. Blockchain infrastructure provider Infura experienced similar problems. The disruption affected users’ connection to Polygon, Optimism, Arbitrum, Linea, Base, and Scroll.
Other major exchanges like Binance, Kraken, and OKX remained operational throughout the incident. Their continued functionality highlighted the varying degrees of AWS dependency across crypto platforms.
AWS Outage Aftermath: Recovery and Lessons
The issue began at 3:11 AM Eastern Time and was largely resolved within approximately three hours. Coinbase reported that services had recovered, though some older asset transfer requests remained pending. The platform worked to process these delayed transactions.
This incident followed a similar AWS outage in April that affected Binance and KuCoin. The repeated disruptions raise serious questions about infrastructure resilience. CEO Mehdi Daoudi of internet monitoring firm Catchpoint estimated the financial impact could reach hundreds of billions of dollars.
The outage affected far more than crypto platforms. Reddit, Snapchat, Hulu, Electronic Arts, and Xbox Network all experienced simultaneous service interruptions. In Italy, public and banking portals reported access problems, notably Agenzia delle Entrate and Intesa Sanpaolo.
Decentralization Debate: AWS and Crypto Infrastructure
An AWS outage won’t bring Ethereum to a halt as other nodes hosted on competing clouds or self-run hardware will continue to process transactions. Yet the concentration level underlines how much decentralized crypto depends on centralized infrastructure.
Crypto developers aim to create a decentralized internet that isn’t reliant on one party, in the spirit of Bitcoin. The reality contradicts this vision. Running nodes in-house requires expensive hardware, stable electricity, and bandwidth. These are resources that large data centers provide at scale.
Cloud hosting remains the practical choice for smaller crypto projects. AWS offers cheaper, faster deployment options for startups. This convenience trades resilience for efficiency. An overreliance on a few cloud providers creates structural risk for the emerging industry.
Layer-1 blockchain companies like Vanar Chain are building decentralized cloud infrastructure solutions to address this issue. These alternatives aim to eliminate single points of failure that could disrupt critical services.
Conclusion
The October 20 AWS outage serves as a stark reminder of crypto’s infrastructure vulnerabilities. While funds remained secure, the incident exposed how centralized systems still underpin supposedly decentralized platforms. The crypto industry must develop truly independent infrastructure to achieve its decentralization goals.
