diff --git a/src/components/LHNOptionsList/OptionRowLHNData.tsx b/src/components/LHNOptionsList/OptionRowLHNData.tsx
index 0db8e581e23e..121390d808b5 100644
--- a/src/components/LHNOptionsList/OptionRowLHNData.tsx
+++ b/src/components/LHNOptionsList/OptionRowLHNData.tsx
@@ -37,7 +37,7 @@ function OptionRowLHNData({
 
     const optionItemRef = useRef<OptionData>();
 
-    const hasViolations = canUseViolations && ReportUtils.doesTransactionThreadHaveViolations(fullReport, transactionViolations, parentReportAction ?? null);
+    const shouldDisplayViolations = canUseViolations && ReportUtils.shouldDisplayTransactionThreadViolations(fullReport, transactionViolations, parentReportAction ?? null);
 
     const optionItem = useMemo(() => {
         // Note: ideally we'd have this as a dependent selector in onyx!
@@ -48,7 +48,7 @@ function OptionRowLHNData({
             preferredLocale: preferredLocale ?? CONST.LOCALES.DEFAULT,
             policy,
             parentReportAction,
-            hasViolations: !!hasViolations,
+            hasViolations: !!shouldDisplayViolations,
         });
         if (deepEqual(item, optionItemRef.current)) {
             return optionItemRef.current;
diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index 14041fbe35ce..b7b9b6e0035c 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -4246,6 +4246,21 @@ function doesTransactionThreadHaveViolations(report: OnyxEntry<Report>, transact
     return TransactionUtils.hasViolation(IOUTransactionID, transactionViolations);
 }
 
+/**
+ * Checks if we should display violation - we display violations when the money request has violation and it is not settled
+ */
+function shouldDisplayTransactionThreadViolations(
+    report: OnyxEntry<Report>,
+    transactionViolations: OnyxCollection<TransactionViolation[]>,
+    parentReportAction: OnyxEntry<ReportAction>,
+): boolean {
+    const {IOUReportID} = (parentReportAction?.originalMessage as IOUMessage) ?? {};
+    if (isSettled(IOUReportID)) {
+        return false;
+    }
+    return doesTransactionThreadHaveViolations(report, transactionViolations, parentReportAction);
+}
+
 /**
  * Checks to see if a report contains a violation
  */
@@ -5622,6 +5637,7 @@ export {
     getRoom,
     canEditReportDescription,
     doesTransactionThreadHaveViolations,
+    shouldDisplayTransactionThreadViolations,
     hasViolations,
     navigateToPrivateNotes,
     canEditWriteCapability,