diff --git a/src/Simplex/Messaging/Crypto.hs b/src/Simplex/Messaging/Crypto.hs
index 8f2924dd0..c5d727aad 100644
--- a/src/Simplex/Messaging/Crypto.hs
+++ b/src/Simplex/Messaging/Crypto.hs
@@ -691,6 +691,8 @@ data CryptoError
   | -- | message is larger that allowed padded length minus 2 (to prepend message length)
     -- (or required un-padded length is larger than the message length)
     CryptoLargeMsgError
+  | -- | padded message is shorter than 2 bytes
+    CryptoInvalidMsgError
   | -- | failure parsing message header
     CryptoHeaderError String
   | -- | no sending chain key in ratchet state
@@ -802,9 +804,12 @@ decryptAEAD aesKey ivBytes ad msg (AuthTag authTag) = do
   aead <- initAEAD @AES256 aesKey ivBytes
   liftEither . unPad =<< maybeError AESDecryptError (AES.aeadSimpleDecrypt aead ad msg authTag)
 
+maxMsgLen :: Int
+maxMsgLen = 2 ^ (16 :: Int) - 3
+
 pad :: ByteString -> Int -> Either CryptoError ByteString
 pad msg paddedLen
-  | padLen >= 0 = Right $ encodeWord16 (fromIntegral len) <> msg <> B.replicate padLen '#'
+  | len <= maxMsgLen && padLen >= 0 = Right $ encodeWord16 (fromIntegral len) <> msg <> B.replicate padLen '#'
   | otherwise = Left CryptoLargeMsgError
   where
     len = B.length msg
@@ -812,8 +817,8 @@ pad msg paddedLen
 
 unPad :: ByteString -> Either CryptoError ByteString
 unPad padded
-  | B.length rest >= len = Right $ B.take len rest
-  | otherwise = Left CryptoLargeMsgError
+  | B.length lenWrd == 2 && B.length rest >= len = Right $ B.take len rest
+  | otherwise = Left CryptoInvalidMsgError
   where
     (lenWrd, rest) = B.splitAt 2 padded
     len = fromIntegral $ decodeWord16 lenWrd
diff --git a/tests/CoreTests/CryptoTests.hs b/tests/CoreTests/CryptoTests.hs
new file mode 100644
index 000000000..7913ae33b
--- /dev/null
+++ b/tests/CoreTests/CryptoTests.hs
@@ -0,0 +1,39 @@
+{-# LANGUAGE OverloadedStrings #-}
+{-# OPTIONS_GHC -Wno-unrecognised-pragmas #-}
+{-# HLINT ignore "Redundant if" #-}
+module CoreTests.CryptoTests (cryptoTests) where
+
+import qualified Simplex.Messaging.Crypto as C
+import Test.Hspec
+import Test.Hspec.QuickCheck (modifyMaxSuccess)
+import Test.QuickCheck
+import qualified Data.Text as T
+import qualified Data.ByteString.Char8 as B
+import qualified Data.ByteString.Lazy.Char8 as LB
+import Data.Text.Encoding (encodeUtf8, decodeUtf8)
+
+cryptoTests :: Spec
+cryptoTests = modifyMaxSuccess (const 10000) $ do
+  describe "padding / unpadding" $ do
+    it "should pad / unpad string" . property $ \(s, paddedLen) ->
+      let b = encodeUtf8 $ T.pack s
+          len = B.length b
+          padded = C.pad b paddedLen
+       in if len < 2 ^ (16 :: Int) - 3 && len <= paddedLen - 2
+            then (fmap (T.unpack . decodeUtf8) . C.unPad =<< padded) == Right s
+            else padded == Left C.CryptoLargeMsgError
+    it "pad should fail on large string" $ do
+      C.pad "abc" 5 `shouldBe` Right "\000\003abc"
+      C.pad "abc" 4 `shouldBe` Left C.CryptoLargeMsgError
+      (C.unPad =<< C.pad (str 65533) 65535) `shouldBe` Right (str 65533)
+      C.pad (str 65534) 65536 `shouldBe` Left C.CryptoLargeMsgError
+      C.pad (str 65535) 65537 `shouldBe` Left C.CryptoLargeMsgError
+    it "unpad should fail on invalid string" $ do
+      C.unPad "\000\000" `shouldBe` Right ""
+      C.unPad "\000" `shouldBe` Left C.CryptoInvalidMsgError
+      C.unPad "" `shouldBe` Left C.CryptoInvalidMsgError
+    it "unpad should fail on shorter string" $ do
+      C.unPad "\000\003abc" `shouldBe` Right "abc"
+      C.unPad "\000\003ab" `shouldBe` Left C.CryptoInvalidMsgError
+      where
+        str n = LB.toStrict $ LB.take n $ LB.repeat 'a'
diff --git a/tests/Test.hs b/tests/Test.hs
index d67277dd3..61e09a2b7 100644
--- a/tests/Test.hs
+++ b/tests/Test.hs
@@ -1,6 +1,7 @@
 {-# LANGUAGE TypeApplications #-}
 
 import AgentTests (agentTests)
+import CoreTests.CryptoTests
 import CoreTests.EncodingTests
 import CoreTests.ProtocolErrorTests
 import CoreTests.VersionRangeTests
@@ -22,6 +23,7 @@ main = do
       describe "Encoding tests" encodingTests
       describe "Protocol error tests" protocolErrorTests
       describe "Version range" versionRangeTests
+      describe "Encryption tests" cryptoTests
     describe "SMP server via TLS" $ serverTests (transport @TLS)
     describe "SMP server via WebSockets" $ serverTests (transport @WS)
     describe "Notifications server" $ ntfServerTests (transport @TLS)