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The disruption came during a turbulent stretch for Coinbase after the company 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 for latency and co-location of clients," he wrote.
Crypto Still Runs On Big Tech
Armstrong said Coinbase would now revisit some of those infrastructure tradeoffs following the outage.
"At a minimum, the duration of an outage should be able to be reduced considerably when an AZ move is needed," he said.
Coinbase said customer funds remained safe throughout the disruption.
Shortly after Armstrong's post, Coinbase Head of Platform Rob Witoff shared additional details about the outage, saying failures inside the affected AWS zone disrupted parts of the exchange's matching engine and Kafka messaging infrastructure.
Witoff said Coinbase's primary exchange systems run in a single zone to minimize latency, while backup systems designed to isolate failures did not work as expected during the incident, extending the outage and forcing engineers to manually execute disaster recovery procedures.
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