diff --git a/app/app.go b/app/app.go
index c3db6222..45391fe6 100644
--- a/app/app.go
+++ b/app/app.go
@@ -378,16 +378,38 @@ func (app *KiichainApp) EndBlocker(ctx sdk.Context) (sdk.EndBlock, error) {
 func (app *KiichainApp) InitChainer(ctx sdk.Context, req *abci.RequestInitChain) (*abci.ResponseInitChain, error) {
 	var genesisState GenesisState
 	if err := tmjson.Unmarshal(req.AppStateBytes, &genesisState); err != nil {
-		panic(err)
+		return nil, fmt.Errorf("failed to unmarshal genesis state: %w", err)
 	}
 
 	if err := app.UpgradeKeeper.SetModuleVersionMap(ctx, app.mm.GetVersionMap()); err != nil {
-		panic(err)
+		return nil, fmt.Errorf("failed to set module version map: %w", err)
 	}
 
-	response, err := app.mm.InitGenesis(ctx, app.appCodec, genesisState)
-	if err != nil {
-		panic(err)
+	var (
+		response *abci.ResponseInitChain
+		initErr  error
+	)
+
+	// Use recover() as a safety net for module InitGenesis panics.
+	// Cosmos SDK v0.53.6's Manager.InitGenesis does NOT recover panics, so a
+	// panic in any module's InitGenesis would crash the node.  This guard
+	// converts module panics to returned errors, allowing the app to shut
+	// down cleanly instead of crashing mid-genesis.
+	//
+	// Long-term fix: refactor the four custom modules (x/tokenfactory,
+	// x/rewards, x/feeabstraction, x/oracle) to return errors instead of
+	// panicking in their InitGenesis implementations.
+	func() {
+		defer func() {
+			if r := recover(); r != nil {
+				initErr = fmt.Errorf("panic recovered during InitGenesis: %v", r)
+			}
+		}()
+		response, initErr = app.mm.InitGenesis(ctx, app.appCodec, genesisState)
+	}()
+
+	if initErr != nil {
+		return nil, fmt.Errorf("failed to run InitGenesis: %w", initErr)
 	}
 
 	return response, nil
diff --git a/x/feeabstraction/module.go b/x/feeabstraction/module.go
index 3e91963c..b2a0f862 100644
--- a/x/feeabstraction/module.go
+++ b/x/feeabstraction/module.go
@@ -147,7 +147,9 @@ func (am AppModule) RegisterServices(c module.Configurator) {
 func (am AppModule) InitGenesis(ctx sdk.Context, cdc codec.JSONCodec, gs json.RawMessage) []abci.ValidatorUpdate {
 	// Unmarshal the genesis state
 	var genState types.GenesisState
-	cdc.MustUnmarshalJSON(gs, &genState)
+	if err := cdc.UnmarshalJSON(gs, &genState); err != nil {
+		panic(fmt.Errorf("failed to unmarshal %s genesis state: %w", types.ModuleName, err))
+	}
 
 	// Initialize the genesis
 	err := am.keeper.InitGenesis(ctx, genState)
diff --git a/x/oracle/module.go b/x/oracle/module.go
index 231e3373..7919dfdd 100644
--- a/x/oracle/module.go
+++ b/x/oracle/module.go
@@ -145,7 +145,9 @@ func (am AppModule) RegisterServices(cfg module.Configurator) {
 // InitGenesis trigger the genesis initialization
 func (am AppModule) InitGenesis(ctx sdk.Context, cdc codec.JSONCodec, data json.RawMessage) []abci.ValidatorUpdate {
 	genesis := &types.GenesisState{}
-	cdc.MustUnmarshalJSON(data, genesis)
+	if err := cdc.UnmarshalJSON(data, genesis); err != nil {
+		panic(fmt.Errorf("failed to unmarshal %s genesis state: %w", types.ModuleName, err))
+	}
 	// Initialize the genesis state
 	err := InitGenesis(ctx, am.Kepper, genesis)
 	if err != nil {
diff --git a/x/oracle/types/genesis.go b/x/oracle/types/genesis.go
index 7c6b3739..aa1f9ab3 100644
--- a/x/oracle/types/genesis.go
+++ b/x/oracle/types/genesis.go
@@ -2,6 +2,7 @@ package types
 
 import (
 	"encoding/json"
+	"fmt"
 
 	"github.com/cosmos/cosmos-sdk/codec"
 )
@@ -45,7 +46,9 @@ func GetGenesisStateFromAppState(cdc codec.JSONCodec, appState map[string]json.R
 
 	// Unmarshal current genesis state
 	if appState[ModuleName] != nil {
-		cdc.MustUnmarshalJSON(appState[ModuleName], &genesisState)
+		if err := cdc.UnmarshalJSON(appState[ModuleName], &genesisState); err != nil {
+			panic(fmt.Errorf("failed to unmarshal %s genesis state: %w", ModuleName, err))
+		}
 	}
 
 	return &genesisState
diff --git a/x/rewards/module.go b/x/rewards/module.go
index 3d8a934e..228365f3 100644
--- a/x/rewards/module.go
+++ b/x/rewards/module.go
@@ -149,7 +149,9 @@ func (am AppModule) RegisterServices(cfg module.Configurator) {
 // returns no validator updates.
 func (am AppModule) InitGenesis(ctx sdk.Context, cdc codec.JSONCodec, gs json.RawMessage) []abci.ValidatorUpdate {
 	var genState types.GenesisState
-	cdc.MustUnmarshalJSON(gs, &genState)
+	if err := cdc.UnmarshalJSON(gs, &genState); err != nil {
+		panic(fmt.Errorf("failed to unmarshal %s genesis state: %w", types.ModuleName, err))
+	}
 
 	am.keeper.InitGenesis(ctx, genState)
 
diff --git a/x/tokenfactory/module.go b/x/tokenfactory/module.go
index d4d20030..faaa79c5 100644
--- a/x/tokenfactory/module.go
+++ b/x/tokenfactory/module.go
@@ -166,7 +166,9 @@ func (am AppModule) RegisterServices(cfg module.Configurator) {
 // returns no validator updates.
 func (am AppModule) InitGenesis(ctx sdk.Context, cdc codec.JSONCodec, gs json.RawMessage) []abci.ValidatorUpdate {
 	var genState types.GenesisState
-	cdc.MustUnmarshalJSON(gs, &genState)
+	if err := cdc.UnmarshalJSON(gs, &genState); err != nil {
+		panic(fmt.Errorf("failed to unmarshal %s genesis state: %w", types.ModuleName, err))
+	}
 
 	am.keeper.InitGenesis(ctx, genState)