server/crates/arbiter-server/src/actors/keyholder/mod.rs

@@ -214,7 +214,6 @@ impl KeyHolder {
             let mut conn = self.db.get().await?;
             schema::root_key_history::table
                 .filter(schema::root_key_history::id.eq(*root_key_history_id))
-                .select(schema::root_key_history::data_encryption_nonce)
                 .select(RootKeyHistory::as_select())
                 .first(&mut conn)
                 .await?

server/crates/arbiter-server/src/actors/user_agent/auth/state.rs

@@ -210,13 +210,16 @@ where
             }
         };
 
-        if valid {
+        if !valid {
-            self.transport
+            error!("Invalid challenge solution signature");
-                .send(Ok(Outbound::AuthSuccess))
+            return Err(Error::InvalidChallengeSolution);
-                .await
-                .map_err(|_| Error::Transport)?;
         }
 
+        self.transport
+            .send(Ok(Outbound::AuthSuccess))
+            .await
+            .map_err(|_| Error::Transport)?;
+
         Ok(key.clone())
     }
 }

server/crates/arbiter-server/src/evm/policies/ether_transfer/mod.rs

@@ -91,6 +91,7 @@ async fn query_relevant_past_transaction(
 
 async fn check_rate_limits(
     grant: &Grant<Settings>,
+    current_transfer_value: U256,
     db: &mut impl AsyncConnection<Backend = Sqlite>,
 ) -> QueryResult<Vec<EvalViolation>> {
     let mut violations = Vec::new();
@@ -99,12 +100,12 @@ async fn check_rate_limits(
     let past_transaction = query_relevant_past_transaction(grant.id, window, db).await?;
 
     let window_start = chrono::Utc::now() - grant.settings.limit.window;
-    let cumulative_volume: U256 = past_transaction
+    let prospective_cumulative_volume: U256 = past_transaction
         .iter()
         .filter(|(_, timestamp)| timestamp >= &window_start)
-        .fold(U256::default(), |acc, (value, _)| acc + *value);
+        .fold(current_transfer_value, |acc, (value, _)| acc + *value);
 
-    if cumulative_volume > grant.settings.limit.max_volume {
+    if prospective_cumulative_volume > grant.settings.limit.max_volume {
         violations.push(EvalViolation::VolumetricLimitExceeded);
     }
 
@@ -141,7 +142,7 @@ impl Policy for EtherTransfer {
             violations.push(EvalViolation::InvalidTarget { target: meaning.to });
         }
 
-        let rate_violations = check_rate_limits(grant, db).await?;
+        let rate_violations = check_rate_limits(grant, meaning.value, db).await?;
         violations.extend(rate_violations);
 
         Ok(violations)

server/crates/arbiter-server/src/evm/policies/ether_transfer/tests.rs

@@ -198,7 +198,7 @@ async fn evaluate_rejects_volume_over_limit() {
             grant_id,
             wallet_access_id: WALLET_ACCESS_ID,
             chain_id: CHAIN_ID as i32,
-            eth_value: utils::u256_to_bytes(U256::from(1_001u64)).to_vec(),
+            eth_value: utils::u256_to_bytes(U256::from(1_000u64)).to_vec(),
             signed_at: SqliteTimestamp(Utc::now()),
         })
         .execute(&mut *conn)
@@ -211,7 +211,7 @@ async fn evaluate_rejects_volume_over_limit() {
         shared: shared(),
         settings,
     };
-    let context = ctx(ALLOWED, U256::from(100u64));
+    let context = ctx(ALLOWED, U256::from(1u64));
     let m = EtherTransfer::analyze(&context).unwrap();
     let v = EtherTransfer::evaluate(&context, &m, &grant, &mut *conn)
         .await
@@ -233,13 +233,13 @@ async fn evaluate_passes_at_exactly_volume_limit() {
         .await
         .unwrap();
 
-    // Exactly at the limit — the check is `>`, so this should not violate
+    // Exactly at the limit including current transfer — check is `>`, so this should not violate
     insert_into(evm_transaction_log::table)
         .values(NewEvmTransactionLog {
             grant_id,
             wallet_access_id: WALLET_ACCESS_ID,
             chain_id: CHAIN_ID as i32,
-            eth_value: utils::u256_to_bytes(U256::from(1_000u64)).to_vec(),
+            eth_value: utils::u256_to_bytes(U256::from(900u64)).to_vec(),
             signed_at: SqliteTimestamp(Utc::now()),
         })
         .execute(&mut *conn)

server/crates/arbiter-server/src/evm/policies/token_transfers/mod.rs

@@ -101,6 +101,7 @@ async fn query_relevant_past_transfers(
 
 async fn check_volume_rate_limits(
     grant: &Grant<Settings>,
+    current_transfer_value: U256,
     db: &mut impl AsyncConnection<Backend = Sqlite>,
 ) -> QueryResult<Vec<EvalViolation>> {
     let mut violations = Vec::new();
@@ -113,12 +114,12 @@ async fn check_volume_rate_limits(
 
     for limit in &grant.settings.volume_limits {
         let window_start = chrono::Utc::now() - limit.window;
-        let cumulative_volume: U256 = past_transfers
+        let prospective_cumulative_volume: U256 = past_transfers
             .iter()
             .filter(|(_, timestamp)| timestamp >= &window_start)
-            .fold(U256::default(), |acc, (value, _)| acc + *value);
+            .fold(current_transfer_value, |acc, (value, _)| acc + *value);
 
-        if cumulative_volume > limit.max_volume {
+        if prospective_cumulative_volume > limit.max_volume {
             violations.push(EvalViolation::VolumetricLimitExceeded);
             break;
         }
@@ -163,7 +164,7 @@ impl Policy for TokenTransfer {
             violations.push(EvalViolation::InvalidTarget { target: meaning.to });
         }
 
-        let rate_violations = check_volume_rate_limits(grant, db).await?;
+        let rate_violations = check_volume_rate_limits(grant, meaning.value, db).await?;
         violations.extend(rate_violations);
 
         Ok(violations)

server/crates/arbiter-server/src/evm/policies/token_transfers/tests.rs

@@ -220,7 +220,7 @@ async fn evaluate_rejects_wrong_restricted_recipient() {
 }
 
 #[tokio::test]
-async fn evaluate_passes_volume_within_limit() {
+async fn evaluate_passes_volume_at_exact_limit() {
     let db = db::create_test_pool().await;
     let mut conn = db.get().await.unwrap();
 
@@ -230,7 +230,7 @@ async fn evaluate_passes_volume_within_limit() {
         .await
         .unwrap();
 
-    // Record a past transfer of 500 (within 1000 limit)
+    // Record a past transfer of 900, with current transfer 100 => exactly 1000 limit
     use crate::db::{models::NewEvmTokenTransferLog, schema::evm_token_transfer_log};
     insert_into(evm_token_transfer_log::table)
         .values(NewEvmTokenTransferLog {
@@ -239,7 +239,7 @@ async fn evaluate_passes_volume_within_limit() {
             chain_id: CHAIN_ID as i32,
             token_contract: DAI.to_vec(),
             recipient_address: RECIPIENT.to_vec(),
-            value: utils::u256_to_bytes(U256::from(500u64)).to_vec(),
+            value: utils::u256_to_bytes(U256::from(900u64)).to_vec(),
         })
         .execute(&mut *conn)
         .await
@@ -282,7 +282,7 @@ async fn evaluate_rejects_volume_over_limit() {
             chain_id: CHAIN_ID as i32,
             token_contract: DAI.to_vec(),
             recipient_address: RECIPIENT.to_vec(),
-            value: utils::u256_to_bytes(U256::from(1_001u64)).to_vec(),
+            value: utils::u256_to_bytes(U256::from(1_000u64)).to_vec(),
         })
         .execute(&mut *conn)
         .await
@@ -294,7 +294,7 @@ async fn evaluate_rejects_volume_over_limit() {
         shared: shared(),
         settings,
     };
-    let calldata = transfer_calldata(RECIPIENT, U256::from(100u64));
+    let calldata = transfer_calldata(RECIPIENT, U256::from(1u64));
     let context = ctx(DAI, calldata);
     let m = TokenTransfer::analyze(&context).unwrap();
     let v = TokenTransfer::evaluate(&context, &m, &grant, &mut *conn)

server/crates/arbiter-server/tests/user_agent/auth.rs

@@ -165,3 +165,69 @@ pub async fn test_challenge_auth() {
 
     task.await.unwrap().unwrap();
 }
+
+#[tokio::test]
+#[test_log::test]
+pub async fn test_challenge_auth_rejects_invalid_signature() {
+    let db = db::create_test_pool().await;
+    let actors = GlobalActors::spawn(db.clone()).await.unwrap();
+
+    let new_key = ed25519_dalek::SigningKey::generate(&mut rand::rng());
+    let pubkey_bytes = new_key.verifying_key().to_bytes().to_vec();
+
+    // Pre-register key with key_type
+    {
+        let mut conn = db.get().await.unwrap();
+        insert_into(schema::useragent_client::table)
+            .values((
+                schema::useragent_client::public_key.eq(pubkey_bytes.clone()),
+                schema::useragent_client::key_type.eq(1i32),
+            ))
+            .execute(&mut conn)
+            .await
+            .unwrap();
+    }
+
+    let (server_transport, mut test_transport) = ChannelTransport::new();
+    let db_for_task = db.clone();
+    let task = tokio::spawn(async move {
+        let mut props = UserAgentConnection::new(db_for_task, actors);
+        auth::authenticate(&mut props, server_transport).await
+    });
+
+    test_transport
+        .send(auth::Inbound::AuthChallengeRequest {
+            pubkey: AuthPublicKey::Ed25519(new_key.verifying_key()),
+            bootstrap_token: None,
+        })
+        .await
+        .unwrap();
+
+    let response = test_transport
+        .recv()
+        .await
+        .expect("should receive challenge");
+    let challenge = match response {
+        Ok(resp) => match resp {
+            auth::Outbound::AuthChallenge { nonce } => nonce,
+            other => panic!("Expected AuthChallenge, got {other:?}"),
+        },
+        Err(err) => panic!("Expected Ok response, got Err({err:?})"),
+    };
+
+    // Sign a different challenge value so signature format is valid but verification must fail.
+    let wrong_challenge = arbiter_proto::format_challenge(challenge + 1, &pubkey_bytes);
+    let signature = new_key.sign(&wrong_challenge);
+
+    test_transport
+        .send(auth::Inbound::AuthChallengeSolution {
+            signature: signature.to_bytes().to_vec(),
+        })
+        .await
+        .unwrap();
+
+    assert!(matches!(
+        task.await.unwrap(),
+        Err(auth::Error::InvalidChallengeSolution)
+    ));
+}