diff --git a/crates/xxi-node/src/node/wallet.rs b/crates/xxi-node/src/node/wallet.rs
index c07be697f..ec806fa26 100644
--- a/crates/xxi-node/src/node/wallet.rs
+++ b/crates/xxi-node/src/node/wallet.rs
@@ -71,6 +71,9 @@ impl<D: BdkStorage, S: TenTenOneStorage, N: Storage + Send + Sync + 'static> Nod
     /// Sync the state of the on-chain wallet against the blockchain.
     pub async fn sync_on_chain_wallet(&self) -> Result<()> {
         let client = &self.blockchain.esplora_client_async;
+        // On sync, we unlock our locked utxos, because we are syncing with the blockchain we will
+        // find already spent utxos and release those which were locked unnecessarily.
+        self.wallet.locked_utxos.lock().clear();
 
         let (local_chain, unused_revealed_script_pubkeys, unconfirmed_txids, utxos) =
             spawn_blocking({