diff --git a/account/watcher/watcher.go b/account/watcher/watcher.go
index 41df56b8b..9f5d902cd 100644
--- a/account/watcher/watcher.go
+++ b/account/watcher/watcher.go
@@ -67,6 +67,7 @@ func (w *expiryWatcher) overdueExpirations(blockHeight uint32) {
 				traderKey.SerializeCompressed(),
 				err)
 		}
+		delete(w.expirations, accountKey)
 	}
 
 	delete(w.expirationsPerHeight, blockHeight)
diff --git a/account/watcher/watcher_test.go b/account/watcher/watcher_test.go
new file mode 100644
index 000000000..d457be9e7
--- /dev/null
+++ b/account/watcher/watcher_test.go
@@ -0,0 +1,248 @@
+package watcher
+
+import (
+	"crypto/ecdsa"
+	"errors"
+	"math/rand"
+	"testing"
+	"time"
+
+	"github.com/btcsuite/btcd/btcec"
+	gomock "github.com/golang/mock/gomock"
+)
+
+func randomPrivateKey(seed int64) *btcec.PrivateKey {
+	r := rand.New(rand.NewSource(seed))
+	key, err := ecdsa.GenerateKey(btcec.S256(), r)
+	if err != nil {
+		return nil
+	}
+	return (*btcec.PrivateKey)(key)
+}
+
+func randomPublicKey(seed int64) *btcec.PublicKey {
+	key := randomPrivateKey(seed)
+	return key.PubKey()
+}
+
+func randomAccountKey(seed int64) [33]byte {
+	var accountKey [33]byte
+
+	key := randomPublicKey(seed)
+	copy(accountKey[:], key.SerializeCompressed())
+	return accountKey
+}
+
+var overdueExpirationsTestCases = []struct {
+	name                 string
+	blockHeight          uint32
+	expirations          map[[33]byte]uint32
+	expirationsPerHeight map[uint32][]*btcec.PublicKey
+	handledExpirations   []*btcec.PublicKey
+	checks               []func(watcher *expiryWatcher) error
+}{{
+	name:        "overdue expirations are handled properly",
+	blockHeight: 24,
+	expirations: map[[33]byte]uint32{
+		randomAccountKey(0): 24,
+		randomAccountKey(1): 24,
+		randomAccountKey(2): 24,
+		randomAccountKey(3): 27,
+	},
+	handledExpirations: []*btcec.PublicKey{
+		randomPublicKey(0),
+		randomPublicKey(1),
+		randomPublicKey(2),
+	},
+	expirationsPerHeight: map[uint32][]*btcec.PublicKey{
+		24: {
+			randomPublicKey(0),
+			randomPublicKey(1),
+			randomPublicKey(2),
+		},
+		27: {
+			randomPublicKey(27),
+		},
+	},
+	checks: []func(watcher *expiryWatcher) error{
+		func(watcher *expiryWatcher) error {
+			left := watcher.expirationsPerHeight[24]
+			if len(left) != 0 {
+				return errors.New(
+					"expirations were not " +
+						"handled properly",
+				)
+			}
+			return nil
+		},
+		func(watcher *expiryWatcher) error {
+			if len(watcher.expirations) != 1 {
+				return errors.New(
+					"handled expirations were " +
+						" not deleted",
+				)
+			}
+			return nil
+		},
+	},
+}, {
+	name:        "if account wasn't track we ignore it",
+	blockHeight: 24,
+	expirationsPerHeight: map[uint32][]*btcec.PublicKey{
+		24: {
+			randomPublicKey(3),
+		},
+	},
+	checks: []func(watcher *expiryWatcher) error{},
+}}
+
+func TestOverdueExpirations(t *testing.T) {
+	for _, tc := range overdueExpirationsTestCases {
+		tc := tc
+
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+
+			mockCtrl := gomock.NewController(t)
+			defer mockCtrl.Finish()
+
+			handlers := NewMockEventHandler(mockCtrl)
+			watcher := NewExpiryWatcher(handlers)
+			watcher.expirations = tc.expirations
+			watcher.expirationsPerHeight = tc.expirationsPerHeight
+
+			for _, trader := range tc.handledExpirations {
+				handlers.EXPECT().
+					HandleAccountExpiry(
+						trader,
+						tc.blockHeight,
+					).
+					Return(nil)
+			}
+
+			watcher.NewBlock(tc.blockHeight)
+
+			for _, check := range tc.checks {
+				if err := check(watcher); err != nil {
+					t.Fatal(err)
+				}
+			}
+		})
+	}
+}
+
+var addAccountExpirationTestCases = []struct {
+	name               string
+	bestHeight         uint32
+	initialExpirations map[[33]byte]uint32
+	expirations        map[*btcec.PublicKey]uint32
+	handler            func(*btcec.PublicKey, uint32) error
+	checks             []func(watcher *expiryWatcher) error
+}{{
+	name:       "account is tracked happy path",
+	bestHeight: 20,
+	expirations: map[*btcec.PublicKey]uint32{
+		randomPublicKey(1): 25,
+		randomPublicKey(2): 25,
+		randomPublicKey(3): 25,
+	},
+	checks: []func(watcher *expiryWatcher) error{
+		func(watcher *expiryWatcher) error {
+			if len(watcher.expirations) != 3 {
+				return errors.New(
+					"account expiry not added",
+				)
+			}
+			return nil
+		},
+	},
+}, {
+	name:       "account with earlier expiry are directly handled",
+	bestHeight: 20,
+	expirations: map[*btcec.PublicKey]uint32{
+		randomPublicKey(1): 19,
+	},
+	handler: func(*btcec.PublicKey, uint32) error {
+		return nil
+	},
+	checks: []func(watcher *expiryWatcher) error{
+		func(watcher *expiryWatcher) error {
+			if len(watcher.expirations) != 0 {
+				return errors.New("an account with " +
+					"older expiry hight was added")
+			}
+			return nil
+		},
+	},
+}, {
+	name:       "adding an account that we are already watching",
+	bestHeight: 20,
+	initialExpirations: map[[33]byte]uint32{
+		randomAccountKey(1): 25,
+	},
+	expirations: map[*btcec.PublicKey]uint32{
+		randomPublicKey(1): 35,
+	},
+	handler: func(*btcec.PublicKey, uint32) error {
+		return nil
+	},
+	checks: []func(watcher *expiryWatcher) error{
+		func(watcher *expiryWatcher) error {
+			msg := "account expiry was not updated"
+			if len(watcher.expirationsPerHeight[35]) != 1 {
+				return errors.New(msg)
+			}
+
+			if watcher.expirations[randomAccountKey(1)] != 35 {
+				return errors.New(msg)
+			}
+			return nil
+		},
+	},
+}}
+
+func TestAddAccountExpiration(t *testing.T) {
+	for _, tc := range addAccountExpirationTestCases {
+		tc := tc
+
+		t.Run(tc.name, func(t *testing.T) {
+			t.Parallel()
+
+			mockCtrl := gomock.NewController(t)
+			defer mockCtrl.Finish()
+
+			handlers := NewMockEventHandler(mockCtrl)
+			watcher := NewExpiryWatcher(handlers)
+
+			if len(tc.initialExpirations) > 0 {
+				watcher.expirations = tc.initialExpirations
+			}
+			watcher.bestHeight = tc.bestHeight
+
+			for trader, height := range tc.expirations {
+				if height < tc.bestHeight {
+					handlers.EXPECT().
+						HandleAccountExpiry(
+							trader,
+							tc.bestHeight,
+						).
+						Return(nil)
+				}
+
+				watcher.AddAccountExpiration(trader, height)
+			}
+
+			// The HandleAccountExpiry is executed in the background
+			// give it some time to ensure that the goroutine has time
+			// to get executed. This could potentially trigger
+			// false test failures.
+			time.Sleep(500 * time.Millisecond)
+
+			for _, check := range tc.checks {
+				if err := check(watcher); err != nil {
+					t.Fatal(err)
+				}
+			}
+		})
+	}
+}