diff --git a/src/services/Crypto/Cipher/Cipher.js b/src/services/Crypto/Cipher/Cipher.js
index 8f3a6fb6..4e9b2229 100644
--- a/src/services/Crypto/Cipher/Cipher.js
+++ b/src/services/Crypto/Cipher/Cipher.js
@@ -1,8 +1,11 @@
-const V1 = { iterations: 10000 }
+// keySize is in bytes: 16 => AES-128, 32 => AES-256.
+// V1/V2 must keep keySize 16 so already-stored data stays decryptable.
+const V1 = { iterations: 10000, keySize: 16 }
 const V2 = { ...V1, iterations: 600000 }
+const V3 = { ...V2, keySize: 32 }
 
-const CURRENT_ENCRYPTION_VERSION = 2
-const ENCRYPTION_VERSIONS = { 1: V1, 2: V2 }
+const CURRENT_ENCRYPTION_VERSION = 3
+const ENCRYPTION_VERSIONS = { 1: V1, 2: V2, 3: V3 }
 
 const getVersionConfig = (version) => {
   const config = ENCRYPTION_VERSIONS[version]
@@ -10,12 +13,14 @@ const getVersionConfig = (version) => {
   return config
 }
 
-const KEYSIZE = 16
 const IVSIZE = 12
 const SALTSIZE = 16
 
-const hexToBytes = (hexString) =>
-  Uint8Array.from(hexString.match(/.{1,2}/g).map((byte) => parseInt(byte, 16)))
+const hexToBytes = (hexString) => {
+  const pairs = hexString?.match(/.{1,2}/g)
+  if (!pairs) return new Uint8Array()
+  return Uint8Array.from(pairs.map((byte) => parseInt(byte, 16)))
+}
 
 const binaryStringToBytes = (str) =>
   new Uint8Array([...str].map((c) => c.charCodeAt(0)))
@@ -35,7 +40,7 @@ const generatePBKDF2Key = async ({
   salt,
   version = CURRENT_ENCRYPTION_VERSION,
 }) => {
-  const { iterations } = getVersionConfig(version)
+  const { iterations, keySize } = getVersionConfig(version)
   const currentSalt = salt || (await generateSalt(SALTSIZE))
   const encoder = new TextEncoder()
   const baseKey = await crypto.subtle.importKey(
@@ -53,7 +58,7 @@ const generatePBKDF2Key = async ({
       hash: 'SHA-512',
     },
     baseKey,
-    KEYSIZE * 8,
+    keySize * 8,
   )
   const key = [...new Uint8Array(derivedBits)]
 
diff --git a/src/services/Crypto/Cipher/Cipher.test.js b/src/services/Crypto/Cipher/Cipher.test.js
index 9d5bcf04..54398014 100644
--- a/src/services/Crypto/Cipher/Cipher.test.js
+++ b/src/services/Crypto/Cipher/Cipher.test.js
@@ -72,7 +72,7 @@ test('Cipher - generatePBKDF2Key returns correct key length', async () => {
   })
 
   expect(Array.isArray(key)).toBe(true)
-  expect(key.length).toBe(16)
+  expect(key.length).toBe(32)
   key.forEach((byte) => {
     expect(byte).toBeGreaterThanOrEqual(0)
     expect(byte).toBeLessThanOrEqual(255)
@@ -335,9 +335,13 @@ test('Cipher - decryptAES tampered tag throws', async () => {
 })
 
 test('Cipher - constants are correct', () => {
-  expect(CURRENT_ENCRYPTION_VERSION).toBe(2)
+  expect(CURRENT_ENCRYPTION_VERSION).toBe(3)
   expect(getVersionConfig(1).iterations).toBe(10000)
   expect(getVersionConfig(2).iterations).toBe(600000)
+  expect(getVersionConfig(3).iterations).toBe(600000)
+  expect(getVersionConfig(1).keySize).toBe(16)
+  expect(getVersionConfig(2).keySize).toBe(16)
+  expect(getVersionConfig(3).keySize).toBe(32)
   expect(IVSIZE).toBe(12)
 })
 
@@ -637,3 +641,80 @@ test('Cipher - full cycle with wrong password fails', async () => {
     }),
   ).rejects.toThrow('Incorrect password')
 })
+
+// Mirrors the migration flow in reEncryptAccount: decrypt with the old
+// version, then re-encrypt with a fresh salt under the new version.
+const migrateRoundTrip = async (password, data, fromVersion, toVersion) => {
+  const { key: fromKey, salt: fromSalt } = await generatePBKDF2Key({
+    password,
+    version: fromVersion,
+  })
+  const enc = await encryptAES({ data, key: fromKey })
+
+  const { key: fromKeyAgain } = await generatePBKDF2Key({
+    password,
+    salt: fromSalt,
+    version: fromVersion,
+  })
+  const decrypted = await decryptAES({
+    data: enc.encryptedData,
+    iv: enc.iv,
+    tag: enc.tag,
+    key: fromKeyAgain,
+  })
+  expect(Buffer.from(decrypted).toString()).toBe(data)
+
+  const { key: toKey, salt: toSalt } = await generatePBKDF2Key({
+    password,
+    version: toVersion,
+  })
+  const reEnc = await encryptAES({ data: decrypted, key: toKey })
+
+  const { key: toKeyAgain } = await generatePBKDF2Key({
+    password,
+    salt: toSalt,
+    version: toVersion,
+  })
+  const finalDecrypted = await decryptAES({
+    data: reEnc.encryptedData,
+    iv: reEnc.iv,
+    tag: reEnc.tag,
+    key: toKeyAgain,
+  })
+  expect(Buffer.from(finalDecrypted).toString()).toBe(data)
+
+  return { fromKey, toKey }
+}
+
+test('Cipher - migration v1 -> v2 preserves data (AES-128)', async () => {
+  const { fromKey, toKey } = await migrateRoundTrip(
+    'MyStr0ng!Pass',
+    'seed phrase v1 to v2',
+    1,
+    2,
+  )
+  expect(fromKey.length).toBe(16)
+  expect(toKey.length).toBe(16)
+})
+
+test('Cipher - migration v2 -> v3 upgrades to AES-256 and preserves data', async () => {
+  const { fromKey, toKey } = await migrateRoundTrip(
+    'MyStr0ng!Pass',
+    'seed phrase v2 to v3',
+    2,
+    3,
+  )
+  expect(fromKey.length).toBe(16) // AES-128
+  expect(toKey.length).toBe(32) // AES-256
+})
+
+test('Cipher - migration v1 -> v3 upgrades to AES-256 and preserves data', async () => {
+  const { fromKey, toKey } = await migrateRoundTrip(
+    'MyStr0ng!Pass',
+    'seed phrase v1 to v3',
+    1,
+    3,
+  )
+  expect(fromKey.length).toBe(16) // AES-128
+  expect(toKey.length).toBe(32) // AES-256
+})
diff --git a/src/services/Entity/Account/Account.js b/src/services/Entity/Account/Account.js
index d4a402ca..2a5e9088 100644
--- a/src/services/Entity/Account/Account.js
+++ b/src/services/Entity/Account/Account.js
@@ -13,10 +13,9 @@ import { CURRENT_ENCRYPTION_VERSION } from '../../Crypto/Cipher/Cipher'
 const getAccountVersion = (account) => account.encryptionVersion || 1
 
 const saveAccount = async (data) => {
-  const { generateEncryptionKey } = await loadAccountSubRoutines()
   const { name, password, mnemonic, walletType, walletsToCreate } = data
-  const { salt } = await generateEncryptionKey({ password })
   const {
+    salt,
     encryptedMlTestnetPrivateKey,
     encryptedMlMainnetPrivateKey,
     btcEncryptedSeed,
@@ -26,7 +25,7 @@ const saveAccount = async (data) => {
     mlTestnetPrivKeyTag,
     mlMainnetPrivKeyTag,
     btcTag,
-  } = await getEncryptedPrivateKeys(password, salt, mnemonic)
+  } = await getEncryptedPrivateKeys(password, undefined, mnemonic)
 
   const account = {
     name,
@@ -50,8 +49,7 @@ const saveAccount = async (data) => {
 
 const getAccount = async (id) => {
   const accounts = await IndexedDB.loadAccounts()
-  const account = await IndexedDB.get(accounts, id)
-  return account
+  return IndexedDB.get(accounts, id)
 }
 
 const updateAccount = async (id, updates) => {
@@ -85,8 +83,7 @@ const restoreAccountFromJSON = async (json) => {
 const checkPasswordValidity = async (id, password) => {
   const { generateEncryptionKey, decryptSeed } = await loadAccountSubRoutines()
   try {
-    const accounts = await IndexedDB.loadAccounts()
-    const account = await IndexedDB.get(accounts, id)
+    const account = await getAccount(id)
     if (!account?.salt || !account?.seed?.btcEncryptedSeed) return false
 
     const { key } = await generateEncryptionKey({
@@ -111,8 +108,7 @@ const checkPasswordValidity = async (id, password) => {
 
 const unlockHtlsSecret = async ({ accountId, password, hash }) => {
   const { generateEncryptionKey, decryptSeed } = await loadAccountSubRoutines()
-  const accounts = await IndexedDB.loadAccounts()
-  const account = await IndexedDB.get(accounts, accountId)
+  const account = await getAccount(accountId)
   const isPasswordValid = await checkPasswordValidity(accountId, password)
   if (!isPasswordValid) return Promise.reject('Invalid password')
   if (!account) return Promise.reject('Account not found')
@@ -142,8 +138,7 @@ const unlockHtlsSecret = async ({ accountId, password, hash }) => {
 }
 
 const saveProvidedHtlsSecret = async ({ accountId, password, data }) => {
-  const accounts = await IndexedDB.loadAccounts()
-  const account = await IndexedDB.get(accounts, accountId)
+  const account = await getAccount(accountId)
   const isPasswordValid = await checkPasswordValidity(accountId, password)
   if (!isPasswordValid) return Promise.reject('Invalid password')
   if (!account) return Promise.reject('Account not found')
@@ -164,7 +159,8 @@ const saveProvidedHtlsSecret = async ({ accountId, password, data }) => {
 }
 
 const reEncryptAccount = async (id, password, account, decryptedSeeds) => {
-  const { generateEncryptionKey, encryptSeed } = await loadAccountSubRoutines()
+  const { generateEncryptionKey, encryptSeed, decryptSeed } =
+    await loadAccountSubRoutines()
 
   const { key: newKey, salt: newSalt } = await generateEncryptionKey({
     password,
@@ -197,7 +193,6 @@ const reEncryptAccount = async (id, password, account, decryptedSeeds) => {
   // Re-encrypt HTLS secrets if any
   const updatedHtlsSecrets = {}
   if (account.htlsSecrets) {
-    const { decryptSeed } = await loadAccountSubRoutines()
     const { key: oldKey } = await generateEncryptionKey({
       password,
       salt: account.salt,
@@ -246,8 +241,7 @@ const unlockAccount = async (id, password, { wallets } = {}) => {
   const addresses = {}
 
   try {
-    const accounts = await IndexedDB.loadAccounts()
-    const account = await IndexedDB.get(accounts, id)
+    const account = await getAccount(id)
     const walletsToCreate = AppInfo.DEFAULT_WALLETS_TO_CREATE
 
     if (!account.walletsToCreate)
@@ -258,7 +252,7 @@ const unlockAccount = async (id, password, { wallets } = {}) => {
     const { key } = await generateEncryptionKey({
       password,
       salt: account.salt,
-      version: getAccountVersion(account),
+      version: accountVersion,
     })
 
     const seed = await decryptSeed({
@@ -343,8 +337,8 @@ const unlockAccount = async (id, password, { wallets } = {}) => {
   } catch (e) {
     console.error(e)
     return Promise.reject({
-      address: '',
-      btcPrivateKeys: '',
+      addresses: {},
+      btcPrivateKeys: { btcHDWallet: null, btcAddressData: null },
       name: '',
       mlPrivKeys: { mlMainnetPrivateKey: '', mlTestnetPrivateKey: '' },
     })
diff --git a/src/services/Entity/Account/AccountHelpers.js b/src/services/Entity/Account/AccountHelpers.js
index 580f81de..9fa13d3c 100644
--- a/src/services/Entity/Account/AccountHelpers.js
+++ b/src/services/Entity/Account/AccountHelpers.js
@@ -5,7 +5,10 @@ import loadAccountSubRoutines from './loadWorkers'
 const getEncryptedPrivateKeys = async (password, salt, mnemonic) => {
   const { generateSeed, generateEncryptionKey, encryptSeed } =
     await loadAccountSubRoutines()
-  const { key } = await generateEncryptionKey({ password, salt })
+  const { key, salt: usedSalt } = await generateEncryptionKey({
+    password,
+    salt,
+  })
   const seed = await generateSeed(mnemonic)
 
   const encryptData = async (data) => {
@@ -41,6 +44,7 @@ const getEncryptedPrivateKeys = async (password, salt, mnemonic) => {
   } = await encryptData(seed)
 
   return {
+    salt: usedSalt,
     encryptedMlTestnetPrivateKey,
     encryptedMlMainnetPrivateKey,
     btcEncryptedSeed,