diff --git a/lib/utils/sha3.js b/lib/utils/sha3.js
index f88c164..534651a 100644
--- a/lib/utils/sha3.js
+++ b/lib/utils/sha3.js
@@ -20,20 +20,18 @@
  * @date 2015
  */
 
-
-var utils = require('./utils');
+var CryptoJS = require('crypto-js');
 var sha3 = require('crypto-js/sha3');
 
-module.exports = function (str, isNew) {
-    if (str.substr(0, 2) === '0x' && !isNew) {
-        console.warn('requirement of using web3.fromAscii before sha3 is deprecated');
-        console.warn('new usage: \'web3.sha3("hello")\'');
-        console.warn('see https://github.com/ethereum/web3.js/pull/205');
-        console.warn('if you need to hash hex value, you can do \'sha3("0xfff", true)\'');
-        str = utils.toUtf8(str);
+module.exports = function (value, options) {
+    if (options && options.encoding === 'hex') {
+        if (value.length > 2 && value.substr(0, 2) === '0x') {
+            value = value.substr(2);
+        }
+        value = CryptoJS.enc.Hex.parse(value);
     }
 
-    return sha3(str, {
+    return sha3(value, {
         outputLength: 256
     }).toString();
 };
diff --git a/test/sha3.js b/test/sha3.js
index 7eeff8d..1e7503f 100644
--- a/test/sha3.js
+++ b/test/sha3.js
@@ -4,14 +4,15 @@ var sha3 = require('../lib/utils/sha3');
 var web3 = require('../index');
 
 describe('lib/utils/sha3', function () {
-    var test = function (v, e) {
+    var test = function (v, e, o) {
         it('should encode ' + v + ' to ' + e, function () {
-            assert.equal(sha3(v), e);
+            assert.equal(sha3(v, o), e);
         });
     };
 
     test('test123', 'f81b517a242b218999ec8eec0ea6e2ddbef2a367a14e93f4a32a39e260f686ad');
     test('test(int)', 'f4d03772bec1e62fbe8c5691e1a9101e520e8f8b5ca612123694632bf3cb51b1');
-    test(web3.fromUtf8('test123'), 'f81b517a242b218999ec8eec0ea6e2ddbef2a367a14e93f4a32a39e260f686ad');
+    test('0x80', '56e81f171bcc55a6ff8345e692c0f86e5b48e01b996cadc001622fb5e363b421', { encoding: 'hex' });
+    test('0x80', '6b03a5eef7706e3fb52a61c19ab1122fad7237726601ac665bd4def888f0e4a0');
 });