diff --git a/go.mod b/go.mod
index 7e3d7fa6e..db27b7682 100644
--- a/go.mod
+++ b/go.mod
@@ -20,7 +20,7 @@ require (
 	github.com/lightninglabs/loop/swapserverrpc v1.0.8
 	github.com/lightninglabs/pool v0.6.5-beta.0.20240604070222-e121aadb3289
 	github.com/lightninglabs/pool/auctioneerrpc v1.1.2
-	github.com/lightninglabs/taproot-assets v0.4.0-rc4
+	github.com/lightninglabs/taproot-assets v0.4.0-rc4.0.20240716183814-7647ba8f48d5
 	github.com/lightningnetwork/lnd v0.18.0-beta.rc4.0.20240712025014-90f997c908d0
 	github.com/lightningnetwork/lnd/cert v1.2.2
 	github.com/lightningnetwork/lnd/fn v1.1.0
diff --git a/go.sum b/go.sum
index 2c9b347e2..77e01e621 100644
--- a/go.sum
+++ b/go.sum
@@ -1175,8 +1175,8 @@ github.com/lightninglabs/pool/auctioneerrpc v1.1.2 h1:Dbg+9Z9jXnhimR27EN37foc4aB
 github.com/lightninglabs/pool/auctioneerrpc v1.1.2/go.mod h1:1wKDzN2zEP8srOi0B9iySlEsPdoPhw6oo3Vbm1v4Mhw=
 github.com/lightninglabs/protobuf-go-hex-display v1.30.0-hex-display h1:pRdza2wleRN1L2fJXd6ZoQ9ZegVFTAb2bOQfruJPKcY=
 github.com/lightninglabs/protobuf-go-hex-display v1.30.0-hex-display/go.mod h1:HV8QOd/L58Z+nl8r43ehVNZIU/HEI6OcFqwMG9pJV4I=
-github.com/lightninglabs/taproot-assets v0.4.0-rc4 h1:tl8gClGZBmLlkMxfDRVAdIhx+LyhThZCEjYBpuM37pc=
-github.com/lightninglabs/taproot-assets v0.4.0-rc4/go.mod h1:oAiEnRj2sCbPHAURot+tmKbyDhIoxnvkmag0JqlF1bs=
+github.com/lightninglabs/taproot-assets v0.4.0-rc4.0.20240716183814-7647ba8f48d5 h1:+d5HMOuBUWMsUVx6tAzy7+g8m4A76tec5/FOb1w5iVs=
+github.com/lightninglabs/taproot-assets v0.4.0-rc4.0.20240716183814-7647ba8f48d5/go.mod h1:oAiEnRj2sCbPHAURot+tmKbyDhIoxnvkmag0JqlF1bs=
 github.com/lightningnetwork/lightning-onion v1.2.1-0.20230823005744-06182b1d7d2f h1:Pua7+5TcFEJXIIZ1I2YAUapmbcttmLj4TTi786bIi3s=
 github.com/lightningnetwork/lightning-onion v1.2.1-0.20230823005744-06182b1d7d2f/go.mod h1:c0kvRShutpj3l6B9WtTsNTBUtjSmjZXbJd9ZBRQOSKI=
 github.com/lightningnetwork/lnd v0.18.0-beta.rc4.0.20240712025014-90f997c908d0 h1:V+PoltFSxN5oijkErYe+QbnVz5WJjBsAzaMNRrhmz3Q=
diff --git a/itest/litd_custom_channels_test.go b/itest/litd_custom_channels_test.go
index 640326804..9904c2919 100644
--- a/itest/litd_custom_channels_test.go
+++ b/itest/litd_custom_channels_test.go
@@ -369,32 +369,50 @@ func testCustomChannels(_ context.Context, net *NetworkHarness,
 	logBalance(t.t, nodes, assetID, "initial")
 
 	// ------------
-	// Test case 1: Send a direct keysend payment from Charlie to Dave.
+	// Test case 1: Send a direct keysend payment from Charlie to Dave,
+	// sending the whole balance.
 	// ------------
-	const keySendAmount = 1000
+	keySendAmount := charlieFundingAmount
 	sendAssetKeySendPayment(
-		t.t, charlie, dave, keySendAmount, assetID, fn.None[int64](),
+		t.t, charlie, dave, charlieFundingAmount, assetID,
+		fn.None[int64](),
 	)
 	logBalance(t.t, nodes, assetID, "after keysend")
 
 	charlieAssetBalance -= keySendAmount
 	daveAssetBalance += keySendAmount
 
-	// We should be able to send the 1000 assets back immediately, because
+	// We should be able to send 1000 assets back immediately, because
 	// there is enough on-chain balance on Dave's side to be able to create
 	// an HTLC. We use an invoice to execute another code path.
+	const charlieInvoiceAmount = 1_000
 	invoiceResp := createAssetInvoice(
-		t.t, dave, charlie, keySendAmount, assetID,
+		t.t, dave, charlie, charlieInvoiceAmount, assetID,
 	)
 	payInvoiceWithAssets(t.t, dave, charlie, invoiceResp, assetID, true)
+	logBalance(t.t, nodes, assetID, "after invoice back")
 
-	charlieAssetBalance += keySendAmount
-	daveAssetBalance -= keySendAmount
+	charlieAssetBalance += charlieInvoiceAmount
+	daveAssetBalance -= charlieInvoiceAmount
 
-	// We should also be able to do a non-asset (BTC only) keysend payment.
+	// We should also be able to do a non-asset (BTC only) keysend payment
+	// from Charlie to Dave. This'll also replenish the BTC balance of
+	// Dave, making it possible to send another asset HTLC below, sending
+	// all assets back to Charlie (so we have enough balance for further
+	// tests).
 	sendKeySendPayment(t.t, charlie, dave, 2000, nil)
 	logBalance(t.t, nodes, assetID, "after BTC only keysend")
 
+	// Let's keysend the rest of the balance back to Charlie.
+	sendAssetKeySendPayment(
+		t.t, dave, charlie, charlieFundingAmount-charlieInvoiceAmount,
+		assetID, fn.None[int64](),
+	)
+	logBalance(t.t, nodes, assetID, "after keysend back")
+
+	charlieAssetBalance += charlieFundingAmount - charlieInvoiceAmount
+	daveAssetBalance -= charlieFundingAmount - charlieInvoiceAmount
+
 	// ------------
 	// Test case 2: Pay a normal invoice from Dave by Charlie, making it
 	// a direct channel invoice payment with no RFQ SCID present in the