diff --git a/itest/assets_test.go b/itest/assets_test.go
index e10d3e2db..df92870ba 100644
--- a/itest/assets_test.go
+++ b/itest/assets_test.go
@@ -812,6 +812,42 @@ func payInvoiceWithSatoshi(t *testing.T, payer *HarnessNode,
 	require.Equal(t, expectedStatus, result.Status)
 }
 
+func payInvoiceWithSatoshiLastHop(t *testing.T, payer *HarnessNode,
+	invoice *lnrpc.AddInvoiceResponse, hopPub []byte,
+	expectedStatus lnrpc.Payment_PaymentStatus) {
+
+	ctxb := context.Background()
+	ctxt, cancel := context.WithTimeout(ctxb, defaultTimeout)
+	defer cancel()
+
+	routeRes, err := payer.RouterClient.BuildRoute(
+		ctxb, &routerrpc.BuildRouteRequest{
+			AmtMsat:        17800,
+			FinalCltvDelta: 80,
+			PaymentAddr:    invoice.PaymentAddr,
+			HopPubkeys:     [][]byte{hopPub},
+		},
+	)
+	require.NoError(t, err)
+
+	res, err := payer.RouterClient.SendToRouteV2(
+		ctxt, &routerrpc.SendToRouteRequest{
+			PaymentHash: invoice.RHash,
+			Route:       routeRes.Route,
+		},
+	)
+
+	switch expectedStatus {
+	case lnrpc.Payment_FAILED:
+		require.NoError(t, err)
+		require.Equal(t, lnrpc.HTLCAttempt_FAILED, res.Status)
+		require.Nil(t, res.Preimage)
+
+	case lnrpc.Payment_SUCCEEDED:
+		require.Equal(t, lnrpc.HTLCAttempt_SUCCEEDED, res.Status)
+	}
+}
+
 func payInvoiceWithAssets(t *testing.T, payer, rfqPeer *HarnessNode,
 	invoice *lnrpc.AddInvoiceResponse, assetID []byte,
 	smallShards bool) (uint64, rfqmath.BigIntFixedPoint) {
diff --git a/itest/litd_custom_channels_test.go b/itest/litd_custom_channels_test.go
index c1612be88..82045f21a 100644
--- a/itest/litd_custom_channels_test.go
+++ b/itest/litd_custom_channels_test.go
@@ -23,6 +23,7 @@ import (
 	"github.com/lightninglabs/taproot-assets/tapscript"
 	"github.com/lightningnetwork/lnd/fn"
 	"github.com/lightningnetwork/lnd/lnrpc"
+	"github.com/lightningnetwork/lnd/lnrpc/invoicesrpc"
 	"github.com/lightningnetwork/lnd/lntest"
 	"github.com/lightningnetwork/lnd/lntest/port"
 	"github.com/lightningnetwork/lnd/lntest/wait"
@@ -499,18 +500,20 @@ func testCustomChannels(_ context.Context, net *NetworkHarness,
 
 	// ------------
 	// Test case 3.5: Pay an asset invoice from Dave by Charlie with normal
-	// payment flow.
+	// satoshi payment flow. We expect that payment to fail, since it's a
+	// direct channel payment and the invoice is for assets, not sats. So
+	// without a conversion, it is rejected by the receiver.
 	// ------------
 	invoiceResp = createAssetInvoice(
 		t.t, charlie, dave, daveInvoiceAssetAmount, assetID,
 	)
 	payInvoiceWithSatoshi(
-		t.t, charlie, invoiceResp, lnrpc.Payment_SUCCEEDED,
+		t.t, charlie, invoiceResp, lnrpc.Payment_FAILED,
 	)
 	logBalance(t.t, nodes, assetID, "after asset invoice paid with sats")
 
 	// We don't need to update the asset balances of Charlie and Dave here
-	// as the invoice was paid with sats.
+	// as the invoice payment failed.
 
 	// ------------
 	// Test case 4: Pay a normal invoice from Erin by Charlie.
@@ -1937,13 +1940,13 @@ func testCustomChannelsLiquidityEdgeCases(_ context.Context,
 	logBalance(t.t, nodes, assetID, "after big asset payment (btc "+
 		"invoice, direct)")
 
-	// Dave sends 200k assets and 2k sats to Yara.
+	// Dave sends 200k assets and 5k sats to Yara.
 	sendAssetKeySendPayment(
 		t.t, dave, yara, 2*bigAssetAmount, assetID,
 		fn.None[int64](), lnrpc.Payment_SUCCEEDED,
 		fn.None[lnrpc.PaymentFailureReason](),
 	)
-	sendKeySendPayment(t.t, dave, yara, 2000)
+	sendKeySendPayment(t.t, dave, yara, 5_000)
 
 	logBalance(t.t, nodes, assetID, "after 200k assets to Yara")
 
@@ -1969,6 +1972,33 @@ func testCustomChannelsLiquidityEdgeCases(_ context.Context,
 
 	logBalance(t.t, nodes, assetID, "after small payment (asset "+
 		"invoice, <354sats)")
+
+	// Edge case: Now Charlie creates an asset invoice to be paid for by
+	// Yara with satoshi. For the last hop we try to settle the invoice in
+	// satoshi, where we will check whether Charlie's strict forwarding
+	// works as expected.
+	invoiceResp = createAssetInvoice(
+		t.t, charlie, dave, 1, assetID,
+	)
+
+	ctxb := context.Background()
+	stream, err := dave.InvoicesClient.SubscribeSingleInvoice(
+		ctxb, &invoicesrpc.SubscribeSingleInvoiceRequest{
+			RHash: invoiceResp.RHash,
+		},
+	)
+	require.NoError(t.t, err)
+
+	// Yara pays Dave with enough satoshis, but Charlie will not settle as
+	// he expects assets.
+	payInvoiceWithSatoshiLastHop(
+		t.t, yara, invoiceResp, dave.PubKey[:], lnrpc.Payment_FAILED,
+	)
+
+	t.lndHarness.LNDHarness.AssertInvoiceState(stream, lnrpc.Invoice_OPEN)
+
+	logBalance(t.t, nodes, assetID, "after failed payment (asset "+
+		"invoice, strict forwarding)")
 }
 
 // testCustomChannelsBalanceConsistency is a test that test the balance of nodes