diff --git a/x/observer/abci.go b/x/observer/abci.go
index f219bb833d..41121ced19 100644
--- a/x/observer/abci.go
+++ b/x/observer/abci.go
@@ -21,10 +21,6 @@ func BeginBlocker(ctx sdk.Context, k keeper.Keeper) {
 		return
 	}
 	totalObserverCountCurrentBlock := allObservers.LenUint()
-	if totalObserverCountCurrentBlock < 0 {
-		ctx.Logger().Error("TotalObserverCount is negative at height", ctx.BlockHeight())
-		return
-	}
 	// #nosec G701 always in range
 	if totalObserverCountCurrentBlock == lastBlockObserverCount.Count {
 		return
diff --git a/x/observer/abci_test.go b/x/observer/abci_test.go
new file mode 100644
index 0000000000..618dad9054
--- /dev/null
+++ b/x/observer/abci_test.go
@@ -0,0 +1,99 @@
+package observer_test
+
+import (
+	"math"
+	"testing"
+
+	"github.com/stretchr/testify/require"
+	keepertest "github.com/zeta-chain/zetacore/testutil/keeper"
+	"github.com/zeta-chain/zetacore/testutil/sample"
+	"github.com/zeta-chain/zetacore/x/observer"
+	"github.com/zeta-chain/zetacore/x/observer/types"
+)
+
+func TestBeginBlocker(t *testing.T) {
+	t.Run("should not update LastObserverCount if not found", func(t *testing.T) {
+		k, ctx, _, _ := keepertest.ObserverKeeper(t)
+
+		observer.BeginBlocker(ctx, *k)
+
+		_, found := k.GetLastObserverCount(ctx)
+		require.False(t, found)
+
+		_, found = k.GetKeygen(ctx)
+		require.False(t, found)
+	})
+
+	t.Run("should not update LastObserverCount if observer set not found", func(t *testing.T) {
+		k, ctx, _, _ := keepertest.ObserverKeeper(t)
+
+		count := 1
+		k.SetLastObserverCount(ctx, &types.LastObserverCount{
+			Count: uint64(count),
+		})
+
+		observer.BeginBlocker(ctx, *k)
+
+		lastObserverCount, found := k.GetLastObserverCount(ctx)
+		require.True(t, found)
+		require.Equal(t, uint64(count), lastObserverCount.Count)
+		require.Equal(t, int64(0), lastObserverCount.LastChangeHeight)
+
+		_, found = k.GetKeygen(ctx)
+		require.False(t, found)
+	})
+
+	t.Run("should not update LastObserverCount if observer set count equal last observed count", func(t *testing.T) {
+		k, ctx, _, _ := keepertest.ObserverKeeper(t)
+
+		count := 1
+		os := sample.ObserverSet(count)
+		k.SetObserverSet(ctx, os)
+		k.SetLastObserverCount(ctx, &types.LastObserverCount{
+			Count: uint64(count),
+		})
+
+		observer.BeginBlocker(ctx, *k)
+
+		lastObserverCount, found := k.GetLastObserverCount(ctx)
+		require.True(t, found)
+		require.Equal(t, uint64(count), lastObserverCount.Count)
+		require.Equal(t, int64(0), lastObserverCount.LastChangeHeight)
+
+		_, found = k.GetKeygen(ctx)
+		require.False(t, found)
+	})
+
+	t.Run("should update LastObserverCount", func(t *testing.T) {
+		k, ctx, _, _ := keepertest.ObserverKeeper(t)
+
+		observeSetLen := 10
+		count := 1
+		os := sample.ObserverSet(observeSetLen)
+		k.SetObserverSet(ctx, os)
+		k.SetLastObserverCount(ctx, &types.LastObserverCount{
+			Count: uint64(count),
+		})
+
+		keygen, found := k.GetKeygen(ctx)
+		require.False(t, found)
+		require.Equal(t, types.Keygen{}, keygen)
+
+		observer.BeginBlocker(ctx, *k)
+
+		keygen, found = k.GetKeygen(ctx)
+		require.True(t, found)
+		require.Empty(t, keygen.GranteePubkeys)
+		require.Equal(t, types.KeygenStatus_PendingKeygen, keygen.Status)
+		require.Equal(t, int64(math.MaxInt64), keygen.BlockNumber)
+
+		inboundEnabled := k.IsInboundEnabled(ctx)
+		require.False(t, inboundEnabled)
+
+		lastObserverCount, found := k.GetLastObserverCount(ctx)
+		require.True(t, found)
+		require.Equal(t, uint64(observeSetLen), lastObserverCount.Count)
+		require.Equal(t, ctx.BlockHeight(), lastObserverCount.LastChangeHeight)
+
+	})
+}