diff --git a/sei-cosmos/x/bank/keeper/send.go b/sei-cosmos/x/bank/keeper/send.go
index b630dee27e..a017ec0fa2 100644
--- a/sei-cosmos/x/bank/keeper/send.go
+++ b/sei-cosmos/x/bank/keeper/send.go
@@ -44,6 +44,7 @@ type SendKeeper interface {
 
 	BlockedAddr(addr sdk.AccAddress) bool
 	RegisterRecipientChecker(RecipientChecker)
+	CanSendTo(ctx sdk.Context, recipient sdk.AccAddress) bool
 }
 
 type RecipientChecker = func(ctx sdk.Context, recipient sdk.AccAddress) bool
diff --git a/sei-cosmos/x/distribution/keeper/keeper.go b/sei-cosmos/x/distribution/keeper/keeper.go
index db84b910f5..00771e8c35 100644
--- a/sei-cosmos/x/distribution/keeper/keeper.go
+++ b/sei-cosmos/x/distribution/keeper/keeper.go
@@ -63,6 +63,10 @@ func (k Keeper) SetWithdrawAddr(ctx sdk.Context, delegatorAddr sdk.AccAddress, w
 		return types.ErrSetWithdrawAddrDisabled
 	}
 
+	if !k.bankKeeper.CanSendTo(ctx, withdrawAddr) {
+		return sdkerrors.Wrapf(sdkerrors.ErrInvalidRecipient, "%s is not allowed to receive external funds", withdrawAddr)
+	}
+
 	ctx.EventManager().EmitEvent(
 		sdk.NewEvent(
 			types.EventTypeSetWithdrawAddress,
@@ -74,6 +78,10 @@ func (k Keeper) SetWithdrawAddr(ctx sdk.Context, delegatorAddr sdk.AccAddress, w
 	return nil
 }
 
+func (k Keeper) canReceiveWithdrawAddr(ctx sdk.Context, withdrawAddr sdk.AccAddress) bool {
+	return !k.blockedAddrs[withdrawAddr.String()] && k.bankKeeper.CanSendTo(ctx, withdrawAddr)
+}
+
 // withdraw rewards from a delegation
 func (k Keeper) WithdrawDelegationRewards(ctx sdk.Context, delAddr sdk.AccAddress, valAddr sdk.ValAddress) (sdk.Coins, error) {
 	val := k.stakingKeeper.Validator(ctx, valAddr)
diff --git a/sei-cosmos/x/distribution/keeper/keeper_test.go b/sei-cosmos/x/distribution/keeper/keeper_test.go
index be3a01fd43..ad0dc3a002 100644
--- a/sei-cosmos/x/distribution/keeper/keeper_test.go
+++ b/sei-cosmos/x/distribution/keeper/keeper_test.go
@@ -3,6 +3,7 @@ package keeper_test
 import (
 	"testing"
 
+	"github.com/ethereum/go-ethereum/common"
 	tmproto "github.com/sei-protocol/sei-chain/sei-tendermint/proto/tendermint/types"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
@@ -32,9 +33,55 @@ func TestSetWithdrawAddr(t *testing.T) {
 	err = app.DistrKeeper.SetWithdrawAddr(ctx, addr[0], addr[1])
 	require.Nil(t, err)
 
+	associatedAddr := seiapp.AddTestAddrs(app, ctx, 1, sdk.NewInt(1000000000))[0]
+	evmAddr := common.HexToAddress("0x1111111111111111111111111111111111111111")
+	castAddr := sdk.AccAddress(evmAddr[:])
+	app.EvmKeeper.SetAddressMapping(ctx, associatedAddr, evmAddr)
+	require.Error(t, app.DistrKeeper.SetWithdrawAddr(ctx, addr[0], castAddr))
+
 	require.Error(t, app.DistrKeeper.SetWithdrawAddr(ctx, addr[0], distrAcc.GetAddress()))
 }
 
+func TestAfterValidatorRemovedFallsBackForInvalidWithdrawAddress(t *testing.T) {
+	app := seiapp.Setup(t, false, false, false)
+	ctx := app.BaseApp.NewContext(false, tmproto.Header{})
+
+	params := app.DistrKeeper.GetParams(ctx)
+	params.WithdrawAddrEnabled = true
+	app.DistrKeeper.SetParams(ctx, params)
+
+	addr := seiapp.AddTestAddrs(app, ctx, 2, sdk.NewInt(1000000000))
+	valAddr := seiapp.ConvertAddrsToValAddrs(addr[:1])[0]
+	valAccAddr := sdk.AccAddress(valAddr)
+	associatedAddr := addr[1]
+	evmAddr := common.HexToAddress("0x2222222222222222222222222222222222222222")
+	castAddr := sdk.AccAddress(evmAddr[:])
+
+	require.True(t, app.BankKeeper.CanSendTo(ctx, castAddr))
+	require.NoError(t, app.DistrKeeper.SetWithdrawAddr(ctx, valAccAddr, castAddr))
+	require.Equal(t, castAddr.String(), app.DistrKeeper.GetDelegatorWithdrawAddr(ctx, valAccAddr).String())
+
+	app.EvmKeeper.SetAddressMapping(ctx, associatedAddr, evmAddr)
+	require.False(t, app.BankKeeper.CanSendTo(ctx, castAddr))
+	require.Equal(t, valAccAddr.String(), app.DistrKeeper.GetDelegatorWithdrawAddr(ctx, valAccAddr).String())
+
+	commission := sdk.DecCoins{sdk.NewDecCoin("usei", sdk.NewInt(10))}
+	coins := sdk.NewCoins(sdk.NewCoin("usei", sdk.NewInt(10)))
+	distrAcc := app.DistrKeeper.GetDistributionAccount(ctx)
+	require.NoError(t, apptesting.FundModuleAccount(app.BankKeeper, ctx, distrAcc.GetName(), coins))
+	app.AccountKeeper.SetModuleAccount(ctx, distrAcc)
+
+	app.DistrKeeper.SetValidatorOutstandingRewards(ctx, valAddr, types.ValidatorOutstandingRewards{Rewards: commission})
+	app.DistrKeeper.SetValidatorAccumulatedCommission(ctx, valAddr, types.ValidatorAccumulatedCommission{Commission: commission})
+
+	balanceBefore := app.BankKeeper.GetBalance(ctx, valAccAddr, "usei")
+	require.NotPanics(t, func() {
+		app.DistrKeeper.Hooks().AfterValidatorRemoved(ctx, sdk.ConsAddress{}, valAddr)
+	})
+	balanceAfter := app.BankKeeper.GetBalance(ctx, valAccAddr, "usei")
+	require.Equal(t, balanceBefore.Amount.Add(sdk.NewInt(10)), balanceAfter.Amount)
+}
+
 func TestWithdrawValidatorCommission(t *testing.T) {
 	app := seiapp.Setup(t, false, false, false)
 	ctx := app.BaseApp.NewContext(false, tmproto.Header{})
diff --git a/sei-cosmos/x/distribution/keeper/store.go b/sei-cosmos/x/distribution/keeper/store.go
index 5f11374a8d..93e5cfa60e 100644
--- a/sei-cosmos/x/distribution/keeper/store.go
+++ b/sei-cosmos/x/distribution/keeper/store.go
@@ -14,7 +14,11 @@ func (k Keeper) GetDelegatorWithdrawAddr(ctx sdk.Context, delAddr sdk.AccAddress
 	if b == nil {
 		return delAddr
 	}
-	return sdk.AccAddress(b)
+	withdrawAddr := sdk.AccAddress(b)
+	if !k.canReceiveWithdrawAddr(ctx, withdrawAddr) {
+		return delAddr
+	}
+	return withdrawAddr
 }
 
 // set the delegator withdraw address
diff --git a/sei-cosmos/x/distribution/types/expected_keepers.go b/sei-cosmos/x/distribution/types/expected_keepers.go
index 72767aecec..90232fa816 100644
--- a/sei-cosmos/x/distribution/types/expected_keepers.go
+++ b/sei-cosmos/x/distribution/types/expected_keepers.go
@@ -27,6 +27,7 @@ type BankKeeper interface {
 	SendCoinsFromModuleToModule(ctx sdk.Context, senderModule string, recipientModule string, amt sdk.Coins) error
 	SendCoinsFromModuleToAccount(ctx sdk.Context, senderModule string, recipientAddr sdk.AccAddress, amt sdk.Coins) error
 	SendCoinsFromAccountToModule(ctx sdk.Context, senderAddr sdk.AccAddress, recipientModule string, amt sdk.Coins) error
+	CanSendTo(ctx sdk.Context, recipient sdk.AccAddress) bool
 }
 
 // StakingKeeper expected staking keeper (noalias)