diff --git a/demo/src/Witness.ts b/demo/src/Witness.ts
index 66b841b102..5f6ce2d3cf 100644
--- a/demo/src/Witness.ts
+++ b/demo/src/Witness.ts
@@ -3,6 +3,7 @@ import type { Transport } from '@aries-framework/core'
 import type { ValueTransferConfig } from '@aries-framework/core'
 
 import { ValueTransferRole } from '@aries-framework/core'
+import { createVerifiableNotes } from '@sicpa-dlab/value-transfer-protocol-ts'
 
 import { BaseAgent } from './BaseAgent'
 import { Output } from './OutputClass'
@@ -27,6 +28,7 @@ export class Witness extends BaseAgent {
       role: ValueTransferRole.Witness,
       getterTransport: Witness.getterTransport,
       giverTransport: Witness.giverTransport,
+      verifiableNotes: createVerifiableNotes(10),
     }
     const witness = new Witness('witness', undefined, Witness.transports, valueTransferConfig)
     await witness.initializeAgent()
diff --git a/packages/core/src/modules/value-transfer/services/ValueTransferService.ts b/packages/core/src/modules/value-transfer/services/ValueTransferService.ts
index 1f5593c376..47b7991fd5 100644
--- a/packages/core/src/modules/value-transfer/services/ValueTransferService.ts
+++ b/packages/core/src/modules/value-transfer/services/ValueTransferService.ts
@@ -5,7 +5,7 @@ import type { Transport } from '../../routing/types'
 import type { ValueTransferStateChangedEvent } from '../ValueTransferEvents'
 import type { ValueTransferRecord, ValueTransferTags } from '../repository'
 
-import { PartyState, ValueTransfer, Wallet, WitnessState } from '@sicpa-dlab/value-transfer-protocol-ts'
+import { PartyState, ValueTransfer, VerifiableNote, Wallet, WitnessState } from '@sicpa-dlab/value-transfer-protocol-ts'
 import { firstValueFrom, ReplaySubject } from 'rxjs'
 import { first, map, timeout } from 'rxjs/operators'
 import { Lifecycle, scoped } from 'tsyringe'
@@ -77,26 +77,40 @@ export class ValueTransferService {
     const publicDid = await this.didService.findPublicDid()
 
     if (config.role === ValueTransferRole.Witness) {
-      const state = await this.witnessStateRepository.findSingleByQuery({})
-      if (state) return
+      const record = await this.witnessStateRepository.findSingleByQuery({})
 
-      if (!publicDid) {
-        throw new AriesFrameworkError(
-          'Witness public DID not found. Please set `publicDidSeed` field in the agent config.'
-        )
-      }
+      if (!record) {
+        if (!publicDid) {
+          throw new AriesFrameworkError(
+            'Witness public DID not found. Please set `publicDidSeed` field in the agent config.'
+          )
+        }
 
-      const record = new WitnessStateRecord({
-        publicDid: publicDid.id,
-        witnessState: new WitnessState(),
-      })
-      await this.witnessStateRepository.save(record)
-      return
-    }
-    if (config.role === ValueTransferRole.Getter || ValueTransferRole.Giver) {
-      const state = await this.valueTransferStateRepository.findSingleByQuery({})
+        const partyStateHashes = ValueTransferService.calculateInitialPartyStateHashes(new Set(config.verifiableNotes))
+
+        const record = new WitnessStateRecord({
+          publicDid: publicDid.id,
+          witnessState: new WitnessState(partyStateHashes),
+        })
+
+        await this.witnessStateRepository.save(record)
+      } else {
+        if (!record.witnessState.partyStateHashes.size) {
+          const partyStateHashes = ValueTransferService.calculateInitialPartyStateHashes(
+            new Set(config.verifiableNotes)
+          )
+
+          for (const hash of partyStateHashes) {
+            record.witnessState.partyStateHashes.add(hash)
+          }
+
+          await this.witnessStateRepository.update(record)
+        }
+      }
+    } else if (config.role === ValueTransferRole.Giver) {
+      const record = await this.valueTransferStateRepository.findSingleByQuery({})
 
-      if (!state) {
+      if (!record) {
         let wallet = new Wallet()
 
         if (config.verifiableNotes?.length) {
@@ -108,16 +122,28 @@ export class ValueTransferService {
           publicDid: publicDid?.id,
           partyState: new PartyState(new Uint8Array(), wallet),
         })
+
         await this.valueTransferStateRepository.save(record)
       } else {
         if (config.verifiableNotes?.length) {
-          if (!state.partyState.wallet.amount()) {
-            state.partyState.wallet.receiveNotes(new Set(config.verifiableNotes))
+          if (!record.partyState.wallet.amount()) {
+            record.partyState.wallet.receiveNotes(new Set(config.verifiableNotes))
           }
 
-          await this.valueTransferStateRepository.update(state)
+          await this.valueTransferStateRepository.update(record)
         }
       }
+    } else if (config.role === ValueTransferRole.Getter) {
+      const record = await this.valueTransferStateRepository.findSingleByQuery({})
+
+      if (!record) {
+        const record = new ValueTransferStateRecord({
+          publicDid: publicDid?.id,
+          partyState: new PartyState(new Uint8Array(), new Wallet()),
+        })
+
+        await this.valueTransferStateRepository.save(record)
+      }
     }
   }
 
@@ -293,4 +319,17 @@ export class ValueTransferService {
       payload: { record: record, previousState },
     })
   }
+
+  private static calculateInitialPartyStateHashes(verifiableNotes: Set<VerifiableNote>) {
+    const partyStateHashes = new Set<Uint8Array>()
+
+    let giverWallet = new Wallet()
+    giverWallet = giverWallet.receiveNotes(new Set(verifiableNotes))[1]
+    partyStateHashes.add(giverWallet.rootHash())
+
+    let getterWallet = new Wallet()
+    partyStateHashes.add(getterWallet.rootHash())
+
+    return partyStateHashes
+  }
 }