diff --git a/src/libxrpl/tx/invariants/MPTInvariant.cpp b/src/libxrpl/tx/invariants/MPTInvariant.cpp
index 1b4a3ad6ee..8c68181801 100644
--- a/src/libxrpl/tx/invariants/MPTInvariant.cpp
+++ b/src/libxrpl/tx/invariants/MPTInvariant.cpp
@@ -414,8 +414,8 @@ ValidMPTTransfer::finalize(
     if (txnType == ttAMM_CLAWBACK)
         return true;
 
-    // DEX transactions (cross-currency payments, offer creates) are subject to
-    // the MPTCanTrade flag in addition to the standard transfer rules.
+    // DEX transactions (AMM[Create,Deposit,Withdraw], cross-currency payments, offer creates) are
+    // subject to the MPTCanTrade flag in addition to the standard transfer rules.
     // A payment is only DEX if it is a cross-currency payment.
     auto const isDEX = [&tx, &txnType] {
         if (txnType == ttPAYMENT)
@@ -425,10 +425,12 @@ ValidMPTTransfer::finalize(
             auto const amount = tx[sfAmount];
             return tx[~sfSendMax].value_or(amount).asset() != amount.asset();
         }
-        return txnType == ttOFFER_CREATE;
+        return txnType == ttAMM_CREATE || txnType == ttAMM_DEPOSIT || txnType == ttAMM_WITHDRAW ||
+            txnType == ttOFFER_CREATE;
     }();
 
     // Only enforce once MPTokensV2 is enabled to preserve consensus with non-V2 nodes.
+    // Log invariant failure error even if MPTokensV2 is disabled.
     auto const enforce = !view.rules().enabled(featureMPTokensV2);
 
     for (auto const& [mptID, values] : amount_)
@@ -447,16 +449,10 @@ ValidMPTTransfer::finalize(
 
         for (auto const& [account, value] : values)
         {
-            // Check once: if any involved account is frozen, the whole
-            // issuance transfer is considered frozen.
-            if (!frozen && isFrozen(view, account, MPTIssue{mptID}))
-            {
-                frozen = true;
-            }
-            // Classify each account as a sender or receiver based on whether
-            // their MPTAmount decreased or increased.
-            if (value.amtBefore.has_value() && value.amtAfter.has_value() &&
-                *value.amtBefore != *value.amtAfter)
+            // Classify each account as a sender or receiver based on whether their MPTAmount
+            // decreased or increased. Count new MPToken holders (no amtBefore) as receivers.
+            if (value.amtAfter.has_value() &&
+                (!value.amtBefore.has_value() || *value.amtBefore != *value.amtAfter))
             {
                 if (*value.amtAfter > *value.amtBefore)
                 {
@@ -467,6 +463,13 @@ ValidMPTTransfer::finalize(
                     ++senders;
                 }
             }
+            // Check once: if any involved account is frozen, the whole
+            // issuance transfer is considered frozen. Only need to check for
+            // frozen if there is a transfer of funds.
+            if (!frozen && isFrozen(view, account, MPTIssue{mptID}))
+            {
+                frozen = true;
+            }
         }
         // A transfer between holders has occurred (senders > 0 && receivers > 0).
         // Fail if the issuance is frozen, does not permit transfers, or — for
diff --git a/src/test/app/MPToken_test.cpp b/src/test/app/MPToken_test.cpp
index a16f9e20d3..088ca0a8df 100644
--- a/src/test/app/MPToken_test.cpp
+++ b/src/test/app/MPToken_test.cpp
@@ -12,6 +12,7 @@
 #include <xrpl/basics/base_uint.h>
 #include <xrpl/beast/utility/Zero.h>
 #include <xrpl/ledger/helpers/AMMHelpers.h>
+#include <xrpl/ledger/helpers/MPTokenHelpers.h>
 #include <xrpl/ledger/helpers/TokenHelpers.h>
 #include <xrpl/protocol/Feature.h>
 #include <xrpl/protocol/TER.h>
@@ -6625,6 +6626,57 @@ class MPToken_test : public beast::unit_test::suite
         BEAST_EXPECT(carolOwnersAfterWithdraw == carolOwnersBeforeWithdraw + 1);
     }
 
+    void
+    testTradeAndTransfer()
+    {
+        using namespace jtx;
+        testcase("Trade and Transfer");
+
+        // Verify canMPTTradeAndTransfer validates the flags when from == to and from != to
+
+        Account const gw{"gw"};
+        Account const alice{"alice"};
+        Account const carol{"carol"};
+        Env env(*this);
+        env.fund(XRP(1'000), gw, alice, carol);
+
+        MPTTester mpt(
+            {.env = env,
+             .issuer = gw,
+             .holders = {alice, carol},
+             .pay = 100,
+             .flags = MPTDEXFlags,
+             .mutableFlags = tmfMPTCanMutateCanTransfer | tmfMPTCanMutateCanTrade});
+
+        // Both flags are enabled
+        BEAST_EXPECT(isTesSuccess(canMPTTradeAndTransfer(*env.current(), mpt, gw, gw)));
+        BEAST_EXPECT(isTesSuccess(canMPTTradeAndTransfer(*env.current(), mpt, gw, alice)));
+        BEAST_EXPECT(isTesSuccess(canMPTTradeAndTransfer(*env.current(), mpt, alice, alice)));
+        BEAST_EXPECT(isTesSuccess(canMPTTradeAndTransfer(*env.current(), mpt, alice, carol)));
+
+        // MPTCanTrade is disabled
+        mpt.set({.mutableFlags = tmfMPTClearCanTrade});
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, gw, gw) == tecNO_PERMISSION);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, gw, alice) == tecNO_PERMISSION);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, alice, alice) == tecNO_PERMISSION);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, alice, carol) == tecNO_PERMISSION);
+
+        // MPTCanTransfer is disabled
+        mpt.set({.mutableFlags = tmfMPTSetCanTrade});
+        mpt.set({.mutableFlags = tmfMPTClearCanTransfer});
+        BEAST_EXPECT(isTesSuccess(canMPTTradeAndTransfer(*env.current(), mpt, gw, gw)));
+        BEAST_EXPECT(isTesSuccess(canMPTTradeAndTransfer(*env.current(), mpt, gw, alice)));
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, alice, alice) == tecNO_AUTH);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, alice, carol) == tecNO_AUTH);
+
+        // Both flags are disabled
+        mpt.set({.mutableFlags = tmfMPTClearCanTrade});
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, gw, gw) == tecNO_PERMISSION);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, gw, alice) == tecNO_PERMISSION);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, alice, alice) == tecNO_PERMISSION);
+        BEAST_EXPECT(canMPTTradeAndTransfer(*env.current(), mpt, alice, carol) == tecNO_PERMISSION);
+    }
+
 public:
     void
     run() override
@@ -6732,6 +6784,9 @@ public:
         // Test AMM
         testBasicAMM(all);
 
+        // Test Trade/Transfer
+        testTradeAndTransfer();
+
         // Fixes
         testFixDoubleOwnerCount(all);
     }