diff --git a/lez/wallet/src/lib.rs b/lez/wallet/src/lib.rs
index 1efe1f3d..f54fd551 100644
--- a/lez/wallet/src/lib.rs
+++ b/lez/wallet/src/lib.rs
@@ -29,7 +29,7 @@ use lee_core::{
     BlockId, Commitment, CommitmentSetDigest, MembershipProof, SharedSecretKey, account::Nonce,
     program::InstructionData,
 };
-use log::info;
+use log::{info, warn};
 use sequencer_service_rpc::{RpcClient as _, SequencerClient};
 use storage::Storage;
 use tokio::io::AsyncWriteExt as _;
@@ -691,6 +691,9 @@ impl WalletCore {
                         .key_chain()
                         .locate_spend(*acc_account_id, &tx.message)
                     else {
+                        warn!(
+                            "No note located for {acc_account_id}; cached state stays stale until the next sync"
+                        );
                         continue;
                     };
                     let (kind, res_acc) =
diff --git a/lez/wallet/src/storage/key_chain.rs b/lez/wallet/src/storage/key_chain.rs
index 54493386..d5986e57 100644
--- a/lez/wallet/src/storage/key_chain.rs
+++ b/lez/wallet/src/storage/key_chain.rs
@@ -451,15 +451,29 @@ impl UserKeyChain {
         Some(new_nullifier)
     }
 
+    /// Constructs the next nullifier based on current account state
+    /// of the ID.
+    fn next_update_nullifier(&self, account_id: AccountId) -> Option<Nullifier> {
+        if let Some(entry) = self.shared_private_account(account_id) {
+            let keys = self.derive_shared_account_keys(entry)?;
+            return Some(NullifierIndex::next_update_nullifier(
+                account_id,
+                &entry.account,
+                &keys.nullifier_secret_key,
+            ));
+        }
+        let acc = self.private_account(account_id)?;
+        Some(NullifierIndex::next_update_nullifier(
+            account_id,
+            acc.account,
+            &acc.key_chain.private_key_holder.nullifier_secret_key,
+        ))
+    }
+
     #[must_use]
     pub fn locate_spend(&self, account_id: AccountId, message: &Message) -> Option<usize> {
         let init = Nullifier::for_account_initialization(&account_id);
-        let update = self.private_account(account_id).map(|acc| {
-            Nullifier::for_account_update(
-                &Commitment::new(&account_id, acc.account),
-                &acc.key_chain.private_key_holder.nullifier_secret_key,
-            )
-        });
+        let update = self.next_update_nullifier(account_id);
         message
             .new_nullifiers
             .iter()