I’ve had a few UniFi Cloud Key wifi controllers with this issue – they seem to be stuck on a particular version of the firmware and can’t be updated. Both manual and automatic firmware updates through the web interface fail.

The symptom is that it looks like it’s doing the firmware update, but after rebooting to apply the update, the Cloud Key is still on the same version you started with.

Apparently there’s a bug in a particular version of the ubnt-tools package that simply fails to apply the update.

The solution is to ssh into the cloud key and update the installed version of ubnt-tools. Once this has been completed, the firmware update installs as expected.

Connect to the UniFi Cloud Key via SSH.

Type in:

dpkg -l |grep ubnt-tools

If ubnt-tools is anything other than 0.9.7-1, then you need to update it.

You can update it by typing:

apt-get update && apt-get install --only-upgrade ubnt-tools

Once the ubnt-tools package is updated, you can run the upgrade by typing:

ubnt-systool fwupdate http://dl.ubnt.com/unifi/cloudkey/firmware/...

and giving the ubnt-systool a full URL to the firmware you want to apply.

You can get the URL for the latest version of the firmware from download.ubnt.com

Source: Solved: Can’t update Cloud Key Firmware – Ubiquiti Networks Community