diff --git a/cmd/ipfs/daemon.go b/cmd/ipfs/daemon.go
index b2104ce6f..56d0dc811 100644
--- a/cmd/ipfs/daemon.go
+++ b/cmd/ipfs/daemon.go
@@ -80,6 +80,15 @@ func daemonFunc(req cmds.Request, res cmds.Response) {
 	// let the user know we're going.
 	fmt.Printf("Initializing daemon...\n")
 
+	ctx := req.Context()
+
+	go func() {
+		select {
+		case <-ctx.Context.Done():
+			fmt.Println("Received interrupt signal, shutting down...")
+		}
+	}()
+
 	// first, whether user has provided the initialization flag. we may be
 	// running in an uninitialized state.
 	initialize, _, err := req.Option(initOptionKwd).Bool()
@@ -111,7 +120,6 @@ func daemonFunc(req cmds.Request, res cmds.Response) {
 		return
 	}
 
-	ctx := req.Context()
 	cfg, err := ctx.GetConfig()
 	if err != nil {
 		res.SetError(err, cmds.ErrNormal)
@@ -149,7 +157,19 @@ func daemonFunc(req cmds.Request, res cmds.Response) {
 		res.SetError(err, cmds.ErrNormal)
 		return
 	}
-	defer node.Close()
+
+	defer func() {
+		// We wait for the node to close first, as the node has children
+		// that it will wait for before closing, such as the API server.
+		node.Close()
+
+		select {
+		case <-ctx.Context.Done():
+			log.Info("Gracefully shut down daemon")
+		default:
+		}
+	}()
+
 	req.Context().ConstructNode = func() (*core.IpfsNode, error) {
 		return node, nil
 	}
diff --git a/cmd/ipfs/main.go b/cmd/ipfs/main.go
index 21ec9b937..4b69e77f8 100644
--- a/cmd/ipfs/main.go
+++ b/cmd/ipfs/main.go
@@ -141,8 +141,9 @@ func main() {
 	}
 
 	// ok, finally, run the command invocation.
-	intrh := invoc.SetupInterruptHandler()
+	intrh, ctx := invoc.SetupInterruptHandler(ctx)
 	defer intrh.Close()
+
 	output, err := invoc.Run(ctx)
 	if err != nil {
 		printErr(err)
@@ -514,14 +515,15 @@ func (ih *IntrHandler) Handle(handler func(count int, ih *IntrHandler), sigs ...
 	}()
 }
 
-func (i *cmdInvocation) SetupInterruptHandler() io.Closer {
+func (i *cmdInvocation) SetupInterruptHandler(ctx context.Context) (io.Closer, context.Context) {
 
 	intrh := NewIntrHandler()
+	ctx, cancelFunc := context.WithCancel(ctx)
+
 	handlerFunc := func(count int, ih *IntrHandler) {
 		switch count {
 		case 1:
-			// first time, try to shut down
-			fmt.Println("Received interrupt signal, shutting down...")
+			fmt.Println() // Prevent un-terminated ^C character in terminal
 
 			ctx := i.req.Context()
 
@@ -535,16 +537,7 @@ func (i *cmdInvocation) SetupInterruptHandler() io.Closer {
 			ih.wg.Add(1)
 			go func() {
 				defer ih.wg.Done()
-
-				// TODO cancel the command context instead
-				n, err := ctx.GetNode()
-				if err != nil {
-					log.Error(err)
-					os.Exit(-1)
-				}
-
-				n.Close()
-				log.Info("Gracefully shut down.")
+				cancelFunc()
 			}()
 
 		default:
@@ -555,7 +548,7 @@ func (i *cmdInvocation) SetupInterruptHandler() io.Closer {
 
 	intrh.Handle(handlerFunc, syscall.SIGHUP, syscall.SIGINT, syscall.SIGTERM)
 
-	return intrh
+	return intrh, ctx
 }
 
 func profileIfEnabled() (func(), error) {