diff --git a/packages/fast-usdc/src/constants.js b/packages/fast-usdc/src/constants.js
index 1bda5e82b53..a03a8cf8827 100644
--- a/packages/fast-usdc/src/constants.js
+++ b/packages/fast-usdc/src/constants.js
@@ -4,6 +4,8 @@
  * @enum {(typeof TxStatus)[keyof typeof TxStatus]}
  */
 export const TxStatus = /** @type {const} */ ({
+  /** tx was observed but not advanced */
+  Observed: 'OBSERVED',
   /** IBC transfer is initiated */
   Advancing: 'ADVANCING',
   /** IBC transfer is complete */
@@ -34,6 +36,8 @@ export const TerminalTxStatus = {
  * @enum {(typeof PendingTxStatus)[keyof typeof PendingTxStatus]}
  */
 export const PendingTxStatus = /** @type {const} */ ({
+  /** tx was observed but not advanced */
+  Observed: 'OBSERVED',
   /** IBC transfer is initiated */
   Advancing: 'ADVANCING',
   /** IBC transfer failed (timed out) */
diff --git a/packages/fast-usdc/src/exos/transaction-feed.js b/packages/fast-usdc/src/exos/transaction-feed.js
index 4e39b52681f..67ffe79fbfd 100644
--- a/packages/fast-usdc/src/exos/transaction-feed.js
+++ b/packages/fast-usdc/src/exos/transaction-feed.js
@@ -69,8 +69,8 @@ export const stateShape = {
 
 /**
  * transaction-feed receives attestations from Oracles, records their
- * evidence, and when enough oracles agree, (if no risks are identified)
- * publishes the results for the advancer to act on.
+ * evidence, and when enough oracles agree, publishes the results for the
+ * advancer to act on.
  *
  * @param {Zone} zone
  * @param {ZCF} zcf
diff --git a/packages/fast-usdc/test/exos/settler.test.ts b/packages/fast-usdc/test/exos/settler.test.ts
index b3c1569494b..d17203bf751 100644
--- a/packages/fast-usdc/test/exos/settler.test.ts
+++ b/packages/fast-usdc/test/exos/settler.test.ts
@@ -303,7 +303,7 @@ test('happy path: disburse to LPs; StatusManager removes tx', async t => {
   await eventLoopIteration();
   const { storage } = t.context;
   t.deepEqual(storage.getDeserialized(`fun.txns.${cctpTxEvidence.txHash}`), [
-    { evidence: cctpTxEvidence, status: undefined },
+    { evidence: cctpTxEvidence, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCED' },
     { split: expectedSplit, status: 'DISBURSED' },
@@ -370,7 +370,7 @@ test('slow path: forward to EUD; remove pending tx', async t => {
   accounts.settlement.transferVResolver.resolve(undefined);
   await eventLoopIteration();
   t.deepEqual(storage.getDeserialized(`fun.txns.${cctpTxEvidence.txHash}`), [
-    { evidence: cctpTxEvidence, status: undefined },
+    { evidence: cctpTxEvidence, status: 'OBSERVED' },
     { risksIdentified: ['TOO_LARGE_AMOUNT'], status: 'ADVANCE_SKIPPED' },
     { status: 'FORWARDED' },
   ]);
@@ -445,7 +445,7 @@ test('skip advance: forward to EUD; remove pending tx', async t => {
   );
   const { storage } = t.context;
   t.deepEqual(storage.getDeserialized(`fun.txns.${cctpTxEvidence.txHash}`), [
-    { evidence: cctpTxEvidence, status: undefined },
+    { evidence: cctpTxEvidence, status: 'OBSERVED' },
     { status: 'ADVANCE_SKIPPED', risksIdentified: ['TOO_LARGE_AMOUNT'] },
     { status: 'FORWARDED' },
   ]);
@@ -520,7 +520,7 @@ test('Settlement for unknown transaction (minted early)', async t => {
   accounts.settlement.transferVResolver.resolve(undefined);
   await eventLoopIteration();
   t.deepEqual(storage.getDeserialized(`fun.txns.${evidence.txHash}`), [
-    { evidence, status: undefined },
+    { evidence, status: 'OBSERVED' },
     { status: 'FORWARDED' },
   ]);
 });
@@ -574,7 +574,7 @@ test('Settlement for Advancing transaction (advance succeeds)', async t => {
   simulate.finishAdvance(cctpTxEvidence, true);
   await eventLoopIteration();
   t.deepEqual(storage.getDeserialized(`fun.txns.${cctpTxEvidence.txHash}`), [
-    { evidence: cctpTxEvidence, status: undefined },
+    { evidence: cctpTxEvidence, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCED' },
     { split: expectedSplit, status: 'DISBURSED' },
@@ -638,7 +638,7 @@ test('Settlement for Advancing transaction (advance fails)', async t => {
   accounts.settlement.transferVResolver.resolve(undefined);
   await eventLoopIteration();
   t.deepEqual(storage.getDeserialized(`fun.txns.${cctpTxEvidence.txHash}`), [
-    { evidence: cctpTxEvidence, status: undefined },
+    { evidence: cctpTxEvidence, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCE_FAILED' },
     { status: 'FORWARDED' },
@@ -688,7 +688,7 @@ test('slow path, and forward fails (terminal state)', async t => {
   ]);
 
   t.deepEqual(storage.getDeserialized(`fun.txns.${evidence.txHash}`), [
-    { evidence, status: undefined },
+    { evidence, status: 'OBSERVED' },
     { status: 'FORWARD_FAILED' },
   ]);
 });
diff --git a/packages/fast-usdc/test/exos/status-manager.test.ts b/packages/fast-usdc/test/exos/status-manager.test.ts
index 3ae3737be1b..0c7f7828a63 100644
--- a/packages/fast-usdc/test/exos/status-manager.test.ts
+++ b/packages/fast-usdc/test/exos/status-manager.test.ts
@@ -64,7 +64,7 @@ test('ADVANCED transactions are published to vstorage', async t => {
 
   const { storage } = t.context;
   t.deepEqual(storage.getDeserialized(`fun.txns.${evidence.txHash}`), [
-    { evidence, status: undefined },
+    { evidence, status: 'OBSERVED' },
     { status: 'ADVANCING' },
   ]);
 });
@@ -92,7 +92,7 @@ test('ADVANCE_SKIPPED transactions are published to vstorage', async t => {
 
   const { storage } = t.context;
   t.deepEqual(storage.getDeserialized(`fun.txns.${evidence.txHash}`), [
-    { evidence, status: undefined },
+    { evidence, status: 'OBSERVED' },
     { status: 'ADVANCE_SKIPPED', risksIdentified: ['RISK1'] },
   ]);
 });
@@ -213,7 +213,7 @@ test('advanceOutcome transitions to ADVANCED and ADVANCE_FAILED', async t => {
   ]);
   await eventLoopIteration();
   t.deepEqual(storage.getDeserialized(`fun.txns.${e1.txHash}`), [
-    { evidence: e1, status: undefined },
+    { evidence: e1, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCED' },
   ]);
@@ -227,7 +227,7 @@ test('advanceOutcome transitions to ADVANCED and ADVANCE_FAILED', async t => {
   ]);
   await eventLoopIteration();
   t.deepEqual(storage.getDeserialized(`fun.txns.${e2.txHash}`), [
-    { evidence: e2, status: undefined },
+    { evidence: e2, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCE_FAILED' },
   ]);
diff --git a/packages/fast-usdc/test/fast-usdc.contract.test.ts b/packages/fast-usdc/test/fast-usdc.contract.test.ts
index 8d7a9fcdbce..682d464e15b 100644
--- a/packages/fast-usdc/test/fast-usdc.contract.test.ts
+++ b/packages/fast-usdc/test/fast-usdc.contract.test.ts
@@ -626,7 +626,7 @@ test.serial('STORY01: advancing happy path for 100 USDC', async t => {
   const sent1 = await cust1.sendFast(t, 108_000_000n, 'osmo1234advanceHappy');
   await transmitTransferAck(); // ack IBC transfer for advance
   const expectedTransitions = [
-    { evidence: sent1, status: undefined },
+    { evidence: sent1, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCED' },
   ];
@@ -835,7 +835,7 @@ test.serial('withdraw all liquidity while ADVANCING', async t => {
   await mint(sent);
   await utils.transmitTransferAck();
   t.like(storage.getDeserialized(`fun.txns.${sent.txHash}`), [
-    { evidence: sent, status: undefined },
+    { evidence: sent, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCED' },
     { status: 'DISBURSED' },
@@ -1019,7 +1019,7 @@ test.serial('Settlement for unknown transaction (operator down)', async t => {
   await eventLoopIteration();
 
   t.deepEqual(storage.getDeserialized(`fun.txns.${sent.txHash}`), [
-    { evidence: sent, status: undefined },
+    { evidence: sent, status: 'OBSERVED' },
     { status: 'FORWARDED' },
   ]);
 });
@@ -1058,7 +1058,7 @@ test.serial('mint received while ADVANCING', async t => {
 
   const split = makeFeeTools(feeConfig).calculateSplit(usdc.make(5_000_000n));
   t.deepEqual(storage.getDeserialized(`fun.txns.${sent.txHash}`), [
-    { evidence: sent, status: undefined },
+    { evidence: sent, status: 'OBSERVED' },
     { status: 'ADVANCING' },
     { status: 'ADVANCED' },
     { split, status: 'DISBURSED' },