diff --git a/packages/localnet/src/handleOnZEVMCalled.ts b/packages/localnet/src/handleOnZEVMCalled.ts
index 836f185..d8729ee 100644
--- a/packages/localnet/src/handleOnZEVMCalled.ts
+++ b/packages/localnet/src/handleOnZEVMCalled.ts
@@ -30,7 +30,6 @@ export const handleOnZEVMCalled = async ({
     const messageContext = {
       sender: isArbitraryCall ? ethers.ZeroAddress : sender,
     };
-    console.log(messageContext);
     log("EVM", `Calling ${receiver} with message ${message}`);
 
     const executeTx = await protocolContracts.gatewayEVM
diff --git a/packages/localnet/src/handleOnZEVMWithdrawn.ts b/packages/localnet/src/handleOnZEVMWithdrawn.ts
index ded8934..c1f2d89 100644
--- a/packages/localnet/src/handleOnZEVMWithdrawn.ts
+++ b/packages/localnet/src/handleOnZEVMWithdrawn.ts
@@ -45,54 +45,29 @@ export const handleOnZEVMWithdrawn = async ({
     const coinType = await zrc20Contract.COIN_TYPE();
     const isGasToken = coinType === 1n;
     const isERC20orZETA = coinType === 2n;
-    if (message !== "0x") {
-      // The message is not empty, so this is a withdrawAndCall operation
-      log("EVM", `Calling ${receiver} with message ${message}`);
-      if (isGasToken) {
-        const executeTx = await protocolContracts.gatewayEVM
-          .connect(tss)
-          .execute(receiver, message, { value: amount, ...deployOpts });
-        await executeTx.wait();
-      } else {
-        const erc20 = getERC20ByZRC20(zrc20);
-        const executeTx = await protocolContracts.custody
-          .connect(tss)
-          .withdrawAndCall(receiver, erc20, amount, message, deployOpts);
-        await executeTx.wait();
-      }
-      const logs = await provider.getLogs({
-        address: receiver,
-        fromBlock: "latest",
+    if (isGasToken) {
+      const tx = await tss.sendTransaction({
+        to: receiver,
+        value: amount,
+        ...deployOpts,
       });
-      logs.forEach((data) => {
-        log("EVM", `Event from contract: ${JSON.stringify(data)}`);
-      });
-    } else {
-      // The message is empty, so this is a withdraw operation
-      if (isGasToken) {
-        const tx = await tss.sendTransaction({
-          to: receiver,
-          value: amount,
-          ...deployOpts,
-        });
-        await tx.wait();
-        log(
-          "EVM",
-          `Transferred ${ethers.formatEther(
-            amount
-          )} native gas tokens from TSS to ${receiver}`
-        );
-      } else if (isERC20orZETA) {
-        const erc20 = getERC20ByZRC20(zrc20);
-        const tx = await protocolContracts.custody
-          .connect(tss)
-          .withdraw(receiver, erc20, amount, deployOpts);
-        await tx.wait();
-        log(
-          "EVM",
-          `Transferred ${amount} ERC-20 tokens from Custody to ${receiver}`
-        );
-      }
+      await tx.wait();
+      log(
+        "EVM",
+        `Transferred ${ethers.formatEther(
+          amount
+        )} native gas tokens from TSS to ${receiver}`
+      );
+    } else if (isERC20orZETA) {
+      const erc20 = getERC20ByZRC20(zrc20);
+      const tx = await protocolContracts.custody
+        .connect(tss)
+        .withdraw(receiver, erc20, amount, deployOpts);
+      await tx.wait();
+      log(
+        "EVM",
+        `Transferred ${amount} ERC-20 tokens from Custody to ${receiver}`
+      );
     }
   } catch (err) {
     const revertOptions = args[9];
diff --git a/packages/localnet/src/handleOnZEVMWithdrawnAndCalled.ts b/packages/localnet/src/handleOnZEVMWithdrawnAndCalled.ts
new file mode 100644
index 0000000..f87789b
--- /dev/null
+++ b/packages/localnet/src/handleOnZEVMWithdrawnAndCalled.ts
@@ -0,0 +1,101 @@
+import { ethers, NonceManager } from "ethers";
+import { handleOnRevertZEVM } from "./handleOnRevertZEVM";
+import { log, logErr } from "./log";
+import { deployOpts } from "./deployOpts";
+import * as ZRC20 from "@zetachain/protocol-contracts/abi/ZRC20.sol/ZRC20.json";
+
+export const handleOnZEVMWithdrawnAndCalled = async ({
+  tss,
+  provider,
+  protocolContracts,
+  args,
+  fungibleModuleSigner,
+  deployer,
+  foreignCoins,
+  exitOnError = false,
+}: {
+  tss: any;
+  provider: ethers.JsonRpcProvider;
+  protocolContracts: any;
+  args: any;
+  fungibleModuleSigner: any;
+  deployer: any;
+  foreignCoins: any[];
+  exitOnError: boolean;
+}) => {
+  log("ZetaChain", "Gateway: 'WithdrawnAndCalled' event emitted");
+  console.log(args);
+  const getERC20ByZRC20 = (zrc20: string) => {
+    const foreignCoin = foreignCoins.find(
+      (coin: any) => coin.zrc20_contract_address === zrc20
+    );
+    if (!foreignCoin) {
+      logErr("EVM", `Foreign coin not found for ZRC20 address: ${zrc20}`);
+      return;
+    }
+    return foreignCoin.asset;
+  };
+  const sender = args[0];
+  const zrc20 = args[3];
+  const amount = args[4];
+  const callOptions = args[8];
+  const isArbitraryCall = callOptions[1];
+  const messageContext = {
+    sender: isArbitraryCall ? ethers.ZeroAddress : sender,
+  };
+  try {
+    const receiver = args[2];
+    const message = args[7];
+    (tss as NonceManager).reset();
+    const zrc20Contract = new ethers.Contract(zrc20, ZRC20.abi, deployer);
+    const coinType = await zrc20Contract.COIN_TYPE();
+    const isGasToken = coinType === 1n;
+    const isERC20orZETA = coinType === 2n;
+    // The message is not empty, so this is a withdrawAndCall operation
+    log("EVM", `Calling ${receiver} with message ${message}`);
+    if (isGasToken) {
+      const executeTx = await protocolContracts.gatewayEVM
+        .connect(tss)
+        .execute(messageContext, receiver, message, {
+          value: amount,
+          ...deployOpts,
+        });
+      await executeTx.wait();
+    } else {
+      const erc20 = getERC20ByZRC20(zrc20);
+      const executeTx = await protocolContracts.custody
+        .connect(tss)
+        .withdrawAndCall(
+          messageContext,
+          receiver,
+          erc20,
+          amount,
+          message,
+          deployOpts
+        );
+      await executeTx.wait();
+    }
+    const logs = await provider.getLogs({
+      address: receiver,
+      fromBlock: "latest",
+    });
+    logs.forEach((data) => {
+      log("EVM", `Event from contract: ${JSON.stringify(data)}`);
+    });
+  } catch (err) {
+    const revertOptions = args[9];
+    return await handleOnRevertZEVM({
+      revertOptions,
+      err,
+      provider,
+      tss,
+      asset: getERC20ByZRC20(zrc20),
+      amount,
+      log,
+      fungibleModuleSigner,
+      protocolContracts,
+      deployOpts,
+      exitOnError,
+    });
+  }
+};
diff --git a/packages/localnet/src/index.ts b/packages/localnet/src/index.ts
index 6d11dc6..b4b5d7a 100755
--- a/packages/localnet/src/index.ts
+++ b/packages/localnet/src/index.ts
@@ -15,6 +15,7 @@ import { deployOpts } from "./deployOpts";
 import { handleOnEVMDeposited } from "./handleOnEVMDeposited";
 import { handleOnZEVMWithdrawn } from "./handleOnZEVMWithdrawn";
 import { createToken } from "./createToken";
+import { handleOnZEVMWithdrawnAndCalled } from "./handleOnZEVMWithdrawnAndCalled";
 
 const FUNGIBLE_MODULE_ADDRESS = "0x735b14BB79463307AAcBED86DAf3322B1e6226aB";
 
@@ -353,6 +354,22 @@ export const initLocalnet = async ({
     });
   });
 
+  protocolContracts.gatewayZEVM.on(
+    "WithdrawnAndCalled",
+    async (...args: Array<any>) => {
+      handleOnZEVMWithdrawnAndCalled({
+        tss,
+        provider,
+        protocolContracts,
+        args,
+        deployer,
+        fungibleModuleSigner,
+        foreignCoins,
+        exitOnError,
+      });
+    }
+  );
+
   protocolContracts.gatewayEVM.on("Called", async (...args: Array<any>) => {
     return await handleOnEVMCalled({
       tss,