diff --git a/CHANGELOG.md b/CHANGELOG.md
index 984509e898..198c5540ef 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -15,6 +15,7 @@
 - [11644](https://github.com/vegaprotocol/vega/issues/11644) - `liveOnly` flag has been added to the `AMM` API to show only active `AMMs`.
 - [11519](https://github.com/vegaprotocol/vega/issues/11519) - Add fees to position API types.
 - [11642](https://github.com/vegaprotocol/vega/issues/11642) - `AMMs` with empty price levels are now allowed.
+- [11711](https://github.com/vegaprotocol/vega/issues/11711) - Manage closed team membership by updating the allow list.
 
 ### 🐛 Fixes
 
diff --git a/core/teams/engine.go b/core/teams/engine.go
index 3ef7cc9f07..22521a4124 100644
--- a/core/teams/engine.go
+++ b/core/teams/engine.go
@@ -134,42 +134,61 @@ func (e *Engine) CreateTeam(ctx context.Context, referrer types.PartyID, determi
 }
 
 func (e *Engine) UpdateTeam(ctx context.Context, referrer types.PartyID, teamID types.TeamID, params *commandspb.UpdateReferralSet_Team) error {
-	teamsToUpdate, exists := e.teams[teamID]
+	teamToUpdate, exists := e.teams[teamID]
 	if !exists {
 		return ErrNoTeamMatchesID(teamID)
 	}
 
-	if teamsToUpdate.Referrer.PartyID != referrer {
+	if teamToUpdate.Referrer.PartyID != referrer {
 		return ErrOnlyReferrerCanUpdateTeam
 	}
 
 	// can't update if empty and nil as it's a mandatory field
 	if params.Name != nil && len(*params.Name) > 0 {
-		teamsToUpdate.Name = ptr.UnBox(params.Name)
+		teamToUpdate.Name = ptr.UnBox(params.Name)
 	}
 
 	// those apply change if not nil only?
 	// to be sure to not erase things by mistake?
 	if params.TeamUrl != nil {
-		teamsToUpdate.TeamURL = ptr.UnBox(params.TeamUrl)
+		teamToUpdate.TeamURL = ptr.UnBox(params.TeamUrl)
 	}
 
 	if params.AvatarUrl != nil {
-		teamsToUpdate.AvatarURL = ptr.UnBox(params.AvatarUrl)
+		teamToUpdate.AvatarURL = ptr.UnBox(params.AvatarUrl)
 	}
 
 	if params.Closed != nil {
-		teamsToUpdate.Closed = ptr.UnBox(params.Closed)
+		teamToUpdate.Closed = ptr.UnBox(params.Closed)
+	}
+
+	// prepare the teamSwitches based on the new allowlist
+	newAllowList := map[string]struct{}{}
+	for _, v := range params.AllowList {
+		newAllowList[v] = struct{}{}
+	}
+
+	for _, v := range teamToUpdate.Referees {
+		// if the referee is not part of the new allowlist,
+		// set it to switch teams at the end of the epoch
+		if _, ok := newAllowList[v.PartyID.String()]; !ok {
+			e.teamSwitches[v.PartyID] = teamSwitch{
+				fromTeam: teamID,
+				// keep it empty to notify the intent of removing this
+				// party completely from the team.
+				toTeam: "",
+			}
+		}
 	}
 
 	if len(params.AllowList) > 0 {
-		teamsToUpdate.AllowList = make([]types.PartyID, 0, len(params.AllowList))
+		teamToUpdate.AllowList = make([]types.PartyID, 0, len(params.AllowList))
 		for _, key := range params.AllowList {
-			teamsToUpdate.AllowList = append(teamsToUpdate.AllowList, types.PartyID(key))
+			teamToUpdate.AllowList = append(teamToUpdate.AllowList, types.PartyID(key))
 		}
 	}
 
-	e.notifyTeamUpdated(ctx, teamsToUpdate)
+	e.notifyTeamUpdated(ctx, teamToUpdate)
 
 	return nil
 }
@@ -296,10 +315,18 @@ func (e *Engine) moveMembers(ctx context.Context, startEpochTime time.Time, epoc
 			JoinedAt:       startEpochTime,
 			StartedAtEpoch: epoch,
 		}
-		toTeam := e.teams[move.toTeam]
-		toTeam.Referees = append(toTeam.Referees, membership)
 
-		e.allTeamMembers[partyID] = toTeam.ID
+		// if there's no to team, this is a referee which have been
+		// remove from an allowlist of a private team.
+		if move.toTeam.IsNoTeam() {
+			// just fully remove the party from the mapping.
+			delete(e.allTeamMembers, partyID)
+		} else {
+			// do as usual.
+			toTeam := e.teams[move.toTeam]
+			toTeam.Referees = append(toTeam.Referees, membership)
+			e.allTeamMembers[partyID] = toTeam.ID
+		}
 		e.notifyRefereeSwitchedTeam(ctx, move, membership)
 	}
 
diff --git a/core/teams/engine_test.go b/core/teams/engine_test.go
index 675c766afa..7923a8e76a 100644
--- a/core/teams/engine_test.go
+++ b/core/teams/engine_test.go
@@ -708,3 +708,54 @@ func testMinEpochsRequired(t *testing.T) {
 	members = te.engine.GetTeamMembers(string(teamID1), 5)
 	assert.Len(t, members, 2)
 }
+
+func TestRemoveFromAllowListRemoveFromTheTeam(t *testing.T) {
+	ctx := vgtest.VegaContext(vgrand.RandomStr(5), vgtest.RandomI64())
+
+	te := newEngine(t)
+
+	require.False(t, te.engine.TeamExists(newTeamID(t)))
+
+	referrer1 := newPartyID(t)
+	referee1 := newPartyID(t)
+	teamID1 := newTeamID(t)
+	name := vgrand.RandomStr(5)
+	teamURL := "https://" + name + ".io"
+	avatarURL := "https://avatar." + name + ".io"
+
+	// create the team
+	expectTeamCreatedEvent(t, te)
+	team1CreationDate := time.Now()
+	te.timeService.EXPECT().GetTimeNow().Return(team1CreationDate).Times(1)
+
+	te.engine.OnEpoch(ctx, types.Epoch{Seq: 1, Action: vegapb.EpochAction_EPOCH_ACTION_START})
+
+	require.NoError(t, te.engine.CreateTeam(ctx, referrer1, teamID1,
+		createTeamWithAllowListCmd(t, name, teamURL, avatarURL, true, []string{referee1.String()})))
+	require.True(t, te.engine.TeamExists(teamID1))
+
+	// referee join the team
+	expectRefereeJoinedTeamEvent(t, te)
+	te.timeService.EXPECT().GetTimeNow().Return(team1CreationDate.Add(10 * time.Second)).Times(1)
+
+	require.NoError(t, te.engine.JoinTeam(ctx, referee1, joinTeamCmd(t, teamID1)))
+	require.True(t, te.engine.IsTeamMember(referee1))
+	// two members in the team
+	assert.Len(t, te.engine.GetTeamMembers(string(teamID1), 0), 2)
+
+	te.engine.OnEpoch(ctx, types.Epoch{Seq: 2, Action: vegapb.EpochAction_EPOCH_ACTION_START})
+
+	// referrer update the team to remove all allowlisted parties
+	expectTeamUpdatedEvent(t, te)
+	// te.timeService.EXPECT().GetTimeNow().Return(team1CreationDate.Add(20 * time.Second)).Times(1)
+	require.NoError(t, te.engine.UpdateTeam(ctx, referrer1, teamID1,
+		updateTeamCmd(t, name, teamURL, avatarURL, true, []string{})))
+	require.True(t, te.engine.TeamExists(teamID1))
+
+	// move to the next epoch
+	expectRefereeSwitchedTeamEvent(t, te)
+	te.engine.OnEpoch(ctx, types.Epoch{Seq: 2, Action: vegapb.EpochAction_EPOCH_ACTION_START})
+	require.False(t, te.engine.IsTeamMember(referee1))
+	// only referrer is team member now
+	assert.Len(t, te.engine.GetTeamMembers(string(teamID1), 0), 1)
+}
diff --git a/core/teams/helpers_for_test.go b/core/teams/helpers_for_test.go
index b148fab0cb..98bc37eccd 100644
--- a/core/teams/helpers_for_test.go
+++ b/core/teams/helpers_for_test.go
@@ -241,6 +241,18 @@ func createTeamCmd(t *testing.T, name, teamURL, avatarURL string) *commandspb.Cr
 	}
 }
 
+func createTeamWithAllowListCmd(t *testing.T, name, teamURL, avatarURL string, closed bool, allowList []string) *commandspb.CreateReferralSet_Team {
+	t.Helper()
+
+	return &commandspb.CreateReferralSet_Team{
+		Name:      name,
+		TeamUrl:   ptr.From(teamURL),
+		AvatarUrl: ptr.From(avatarURL),
+		Closed:    closed,
+		AllowList: allowList,
+	}
+}
+
 func updateTeamCmd(t *testing.T, name, teamURL, avatarURL string, closed bool, allowList []string) *commandspb.UpdateReferralSet_Team {
 	t.Helper()
 
diff --git a/core/types/team.go b/core/types/team.go
index 2af5dadfde..1521048030 100644
--- a/core/types/team.go
+++ b/core/types/team.go
@@ -26,6 +26,10 @@ const teamIDLength = 64
 
 type TeamID string
 
+func (t TeamID) IsNoTeam() bool {
+	return len(string(t)) <= 0
+}
+
 type Team struct {
 	ID TeamID
 
diff --git a/datanode/sqlstore/teams.go b/datanode/sqlstore/teams.go
index 00c78e314e..c408580b70 100644
--- a/datanode/sqlstore/teams.go
+++ b/datanode/sqlstore/teams.go
@@ -256,6 +256,18 @@ func (t *Teams) RefereeJoinedTeam(ctx context.Context, referee *entities.TeamMem
 func (t *Teams) RefereeSwitchedTeam(ctx context.Context, referee *entities.RefereeTeamSwitch) error {
 	defer metrics.StartSQLQuery("Teams", "RefereeSwitchedTeam")()
 
+	// in case the party was removed from the team owner from a team
+	if len(referee.ToTeamID) <= 0 {
+		_, err := t.Exec(
+			ctx,
+			"DELETE FROM team_members WHERE party_id = $1",
+			referee.PartyID,
+		)
+
+		return err
+	}
+
+	// normal path, team_members just being updated.
 	_, err := t.Exec(ctx,
 		`INSERT INTO team_members(team_id, party_id, joined_at, joined_at_epoch, vega_time) VALUES ($1, $2, $3, $4, $5)`,
 		referee.ToTeamID,