diff --git a/cosmos/x/evm/plugins/precompile/plugin.go b/cosmos/x/evm/plugins/precompile/plugin.go
index a625f546e..a95e1b464 100644
--- a/cosmos/x/evm/plugins/precompile/plugin.go
+++ b/cosmos/x/evm/plugins/precompile/plugin.go
@@ -157,7 +157,7 @@ func (p *plugin) Run(
 	defer p.enableReentrancy(sdb)
 
 	// recover from any WriteProtection or OutOfGas panic for the EVM to handle as a vm error
-	defer RecoveryHandler(&err)
+	defer RecoveryHandler(ctx, &err)
 
 	// use a precompile-specific gas meter for dynamic consumption
 	gm := storetypes.NewGasMeter(suppliedGas)
diff --git a/cosmos/x/evm/plugins/precompile/plugin_test.go b/cosmos/x/evm/plugins/precompile/plugin_test.go
index f351f8f7a..0c444e6d9 100644
--- a/cosmos/x/evm/plugins/precompile/plugin_test.go
+++ b/cosmos/x/evm/plugins/precompile/plugin_test.go
@@ -104,12 +104,10 @@ var _ = Describe("plugin", func() {
 	})
 
 	It("should catch panics and propagate", func() {
-		Expect(func() {
-			_, _, _ = p.Run(e, &mockPanicking{
-				err: errors.New("error"),
-			}, []byte{}, addr, new(big.Int), 30, false)
-		},
-		).To(Panic())
+		_, _, vmErr := p.Run(e, &mockPanicking{
+			err: errors.New("error"),
+		}, []byte{}, addr, new(big.Int), 30, false)
+		Expect(errors.Is(vmErr, vm.ErrExecutionReverted)).To(BeTrue())
 	})
 })
 
diff --git a/cosmos/x/evm/plugins/precompile/recovery.go b/cosmos/x/evm/plugins/precompile/recovery.go
index ace605fdd..f03e661aa 100644
--- a/cosmos/x/evm/plugins/precompile/recovery.go
+++ b/cosmos/x/evm/plugins/precompile/recovery.go
@@ -27,12 +27,14 @@ import (
 
 	"github.com/berachain/polaris/eth/core/vm"
 	"github.com/berachain/polaris/lib/utils"
+
+	sdk "github.com/cosmos/cosmos-sdk/types"
 )
 
 // RecoveryHandler is used to recover from any WriteProtection and gas consumption panics that
 // occur during precompile execution; the handler modifies the given error to be returned to the
 // caller. Any other type of panic is propogated up to the caller via panic.
-func RecoveryHandler(err *error) {
+func RecoveryHandler(ctx sdk.Context, vmErr *error) {
 	if panicked := recover(); panicked != nil {
 		// NOTE: this only propagates an error back to the EVM if the type of the given panic
 		// is ErrWriteProtection, Cosmos ErrorOutOfGas, Cosmos ErrorGasOverflow, or Cosmos
@@ -40,16 +42,21 @@ func RecoveryHandler(err *error) {
 		switch {
 		case utils.Implements[error](panicked) &&
 			errors.Is(utils.MustGetAs[error](panicked), vm.ErrWriteProtection):
-			*err = vm.ErrWriteProtection
+			*vmErr = vm.ErrWriteProtection
 		case utils.Implements[storetypes.ErrorGasOverflow](panicked):
 			fallthrough
 		case utils.Implements[storetypes.ErrorOutOfGas](panicked):
 			fallthrough
 		case utils.Implements[storetypes.ErrorNegativeGasConsumed](panicked):
-			*err = vm.ErrOutOfGas
+			*vmErr = vm.ErrOutOfGas
+		case utils.Implements[error](panicked):
+			// any other type of panic value is returned as a vm error: execution reverted
+			// NOTE: precompile txs which panic will be included in the block as failed txs
+			ctx.Logger().Error("panic recovered in precompile execution", "err", panicked)
+			*vmErr = errors.Join(vm.ErrExecutionReverted, utils.MustGetAs[error](panicked))
 		default:
-			// any other type of panic value is ignored and passed up the call stack
-			panic(panicked)
+			ctx.Logger().Error("panic recovered in precompile execution", "panic", panicked)
+			*vmErr = vm.ErrExecutionReverted
 		}
 	}
 }