Coinbase Job Cuts, Financial Losses, and Data Centre Overheat: A Summary
Coinbase went offline for seven hours on Friday after an AWS data centre overheated in Virginia, capping a turbulent week for the exchange.
Key Events:
- Monday: Coinbase announced cutting 700 jobs.
- Thursday: The company reported a $394 million quarterly loss.
- Friday: Due to a thermal failure at an AWS data centre, all trading, transfers, and core exchange functions were suspended from 9 a.m. Singapore time until around 4 p.m. The issue originated in a single AWS availability zone but spread across multiple zones, overwhelming resilience mechanisms.
The Outage:
- Impact: The outage affected not only Coinbase but also CME Group and FanDuel, according to reports.
- Cause: Rising temperatures inside a data centre led to power-related disruptions and forced server shutdowns.
- Context: AWS’s US-EAST-1 region, located in Northern Virginia, is heavily used and hosts a significant share of internet infrastructure, making failures there impactful on a global scale.
The Bigger Picture:
- Global Trends: Similar issues are emerging globally as AI infrastructure demands more power, straining existing grid capacities (e.g., Denmark pausing grid connections for new data centres).
- US Investment: US utilities plan to spend $1.4 trillion by 2030 on AI data centre power, but investment in cooling infrastructure is crucial to prevent thermal events like the one that affected Coinbase.
Previous AWS Outage:
- In October 2025, a DNS failure in the same US-EAST-1 region lasted 15 hours, impacting over 2,500 companies and causing an estimated $1.1 billion in economic losses due to simultaneous updates from two automated systems.