diff --git a/staticaddr/deposit/fsm.go b/staticaddr/deposit/fsm.go
index 01a7edf8..b4c89ec8 100644
--- a/staticaddr/deposit/fsm.go
+++ b/staticaddr/deposit/fsm.go
@@ -4,6 +4,7 @@ import (
 	"context"
 	"errors"
 	"fmt"
+	"sync"
 
 	"github.com/btcsuite/btcd/txscript"
 	"github.com/btcsuite/btcd/wire"
@@ -160,6 +161,12 @@ type FSM struct {
 
 	blockNtfnChan chan uint32
 
+	// stopChan requests shutdown of the block notification loop.
+	stopChan chan struct{}
+
+	// stopOnce ensures Stop is idempotent.
+	stopOnce sync.Once
+
 	// quitChan stops after the FSM stops consuming blockNtfnChan.
 	quitChan chan struct{}
 
@@ -191,6 +198,7 @@ func NewFSM(ctx context.Context, deposit *Deposit, cfg *ManagerConfig,
 		params:               params,
 		address:              address,
 		blockNtfnChan:        make(chan uint32),
+		stopChan:             make(chan struct{}),
 		quitChan:             make(chan struct{}),
 		finalizedDepositChan: finalizedDepositChan,
 	}
@@ -226,6 +234,9 @@ func NewFSM(ctx context.Context, deposit *Deposit, cfg *ManagerConfig,
 					ctx, currentHeight,
 				)
 
+			case <-fsm.stopChan:
+				return
+
 			case <-ctx.Done():
 				return
 			}
@@ -235,6 +246,17 @@ func NewFSM(ctx context.Context, deposit *Deposit, cfg *ManagerConfig,
 	return depoFsm, nil
 }
 
+// Stop requests shutdown of the FSM's block notification loop.
+func (f *FSM) Stop() {
+	if f == nil || f.stopChan == nil {
+		return
+	}
+
+	f.stopOnce.Do(func() {
+		close(f.stopChan)
+	})
+}
+
 // handleBlockNotification inspects the current block height and sends the
 // OnExpiry event to publish the expiry sweep transaction if the deposit timed
 // out, or it republishes the expiry sweep transaction if it was not yet swept.
diff --git a/staticaddr/deposit/manager.go b/staticaddr/deposit/manager.go
index aaadc798..4da45ada 100644
--- a/staticaddr/deposit/manager.go
+++ b/staticaddr/deposit/manager.go
@@ -146,9 +146,7 @@ func (m *Manager) Run(ctx context.Context, initChan chan struct{}) error {
 		case outpoint := <-m.finalizedDepositChan:
 			// If deposits notify us about their finalization, flush
 			// the finalized deposit from memory.
-			m.mu.Lock()
-			delete(m.activeDeposits, outpoint)
-			m.mu.Unlock()
+			m.removeActiveDeposit(outpoint)
 
 		case err = <-newBlockErrChan:
 			return err
@@ -544,6 +542,20 @@ func unlockDeposits(deposits []*Deposit) {
 	}
 }
 
+// removeActiveDeposit removes and stops the FSM for an active outpoint.
+func (m *Manager) removeActiveDeposit(outpoint wire.OutPoint) {
+	m.mu.Lock()
+	fsm, ok := m.activeDeposits[outpoint]
+	if ok {
+		delete(m.activeDeposits, outpoint)
+	}
+	m.mu.Unlock()
+
+	if ok {
+		fsm.Stop()
+	}
+}
+
 // GetAllDeposits returns all active deposits.
 func (m *Manager) GetAllDeposits(ctx context.Context) ([]*Deposit, error) {
 	return m.cfg.Store.AllDeposits(ctx)