diff --git a/src/test/app/AMM_test.cpp b/src/test/app/AMM_test.cpp
index 26b2c5eaea..b616dbc73b 100644
--- a/src/test/app/AMM_test.cpp
+++ b/src/test/app/AMM_test.cpp
@@ -7143,6 +7143,36 @@ private:
         });
     }
 
+    void
+    testFailedPseudoAccount()
+    {
+        testcase("Failed pseudo-account allocation");
+        using namespace test::jtx;
+
+        Env env{*this};
+        env.fund(XRP(30'000), gw, alice);
+        env.close();
+        env(trust(alice, gw["USD"](30'000), 0));
+        env(pay(gw, alice, USD(10'000)));
+        env.close();
+
+        STAmount amount = XRP(10'000);
+        STAmount amount2 = USD(10'000);
+        auto const keylet = keylet::amm(amount.issue(), amount2.issue());
+        for (int i = 0; i < 256; ++i)
+        {
+            AccountID const accountId =
+                ripple::pseudoAccountAddress(*env.current(), keylet.key);
+
+            env(pay(env.master.id(), accountId, XRP(1000)),
+                seq(autofill),
+                fee(autofill),
+                sig(autofill));
+        }
+
+        AMM ammAlice(env, alice, amount, amount2, ter(terADDRESS_COLLISION));
+    }
+
     void
     run() override
     {
@@ -7198,6 +7228,7 @@ private:
         testAMMDepositWithFrozenAssets(all - fixAMMv1_1 - featureAMMClawback);
         testFixReserveCheckOnWithdrawal(all);
         testFixReserveCheckOnWithdrawal(all - fixAMMv1_2);
+        testFailedPseudoAccount();
     }
 };
 
diff --git a/src/xrpld/app/tx/detail/AMMCreate.cpp b/src/xrpld/app/tx/detail/AMMCreate.cpp
index 8e419c7bcb..d6a65dd083 100644
--- a/src/xrpld/app/tx/detail/AMMCreate.cpp
+++ b/src/xrpld/app/tx/detail/AMMCreate.cpp
@@ -183,6 +183,14 @@ AMMCreate::preclaim(PreclaimContext const& ctx)
         return tecAMM_INVALID_TOKENS;
     }
 
+    if (ctx.view.rules().enabled(featureSingleAssetVault))
+    {
+        if (auto const accountId = pseudoAccountAddress(
+                ctx.view, keylet::amm(amount.issue(), amount2.issue()).key);
+            accountId == beast::zero)
+            return terADDRESS_COLLISION;
+    }
+
     // If featureAMMClawback is enabled, allow AMMCreate without checking
     // if the issuer has clawback enabled
     if (ctx.view.rules().enabled(featureAMMClawback))