diff --git a/x/wasm/keeper/reflect_test.go b/x/wasm/keeper/reflect_test.go
index 1336be7fee..0d61867a7b 100644
--- a/x/wasm/keeper/reflect_test.go
+++ b/x/wasm/keeper/reflect_test.go
@@ -542,6 +542,29 @@ func TestWasmRawQueryWithNil(t *testing.T) {
 	require.Equal(t, []byte{}, reflectRawRes.Data)
 }
 
+func TestRustPanicIsHandled(t *testing.T) {
+	ctx, keepers := CreateTestInput(t, false, ReflectFeatures)
+	keeper := keepers.ContractKeeper
+
+	creator := keepers.Faucet.NewFundedRandomAccount(ctx, sdk.NewCoins(sdk.NewInt64Coin("denom", 100000))...)
+
+	// upload code
+	codeID, _, err := keeper.Create(ctx, creator, testdata.CyberpunkContractWasm(), nil)
+	require.NoError(t, err)
+	require.Equal(t, uint64(1), codeID)
+
+	contractAddr, _, err := keeper.Instantiate(ctx, codeID, creator, nil, []byte("{}"), "cyberpunk contract", nil)
+	require.NoError(t, err)
+	require.NotEmpty(t, contractAddr)
+
+	// when panic is triggered
+	msg := []byte(`{"panic":{}}`)
+	gotData, err := keeper.Execute(ctx, contractAddr, creator, msg, nil)
+	require.ErrorIs(t, err, types.ErrExecuteFailed)
+	assert.Contains(t, err.Error(), "panicked at 'This page intentionally faulted'")
+	assert.Nil(t, gotData)
+}
+
 func checkAccount(t *testing.T, ctx sdk.Context, accKeeper authkeeper.AccountKeeper, bankKeeper bankkeeper.Keeper, addr sdk.AccAddress, expected sdk.Coins) {
 	acct := accKeeper.GetAccount(ctx, addr)
 	if expected == nil {
diff --git a/x/wasm/keeper/testdata/cyberpunk.wasm b/x/wasm/keeper/testdata/cyberpunk.wasm
new file mode 100644
index 0000000000..355804ad13
Binary files /dev/null and b/x/wasm/keeper/testdata/cyberpunk.wasm differ
diff --git a/x/wasm/keeper/testdata/download_releases.sh b/x/wasm/keeper/testdata/download_releases.sh
index 2757613968..544cdd2e88 100755
--- a/x/wasm/keeper/testdata/download_releases.sh
+++ b/x/wasm/keeper/testdata/download_releases.sh
@@ -9,7 +9,7 @@ fi
 
 tag="$1"
 
-for contract in burner hackatom ibc_reflect ibc_reflect_send reflect staking; do
+for contract in burner hackatom ibc_reflect ibc_reflect_send reflect staking cyberpunk; do
   url="https://github.com/CosmWasm/cosmwasm/releases/download/$tag/${contract}.wasm"
   echo "Downloading $url ..."
   wget -O "${contract}.wasm" "$url"
diff --git a/x/wasm/keeper/testdata/reflect.go b/x/wasm/keeper/testdata/reflect.go
index 64fed6150a..2074ef96fd 100644
--- a/x/wasm/keeper/testdata/reflect.go
+++ b/x/wasm/keeper/testdata/reflect.go
@@ -13,6 +13,9 @@ var reflectContract []byte
 //go:embed reflect_1_1.wasm
 var migrateReflectContract []byte
 
+//go:embed cyberpunk.wasm
+var cyberpunkContract []byte
+
 func ReflectContractWasm() []byte {
 	return reflectContract
 }
@@ -21,6 +24,10 @@ func MigrateReflectContractWasm() []byte {
 	return migrateReflectContract
 }
 
+func CyberpunkContractWasm() []byte {
+	return cyberpunkContract
+}
+
 // ReflectHandleMsg is used to encode handle messages
 type ReflectHandleMsg struct {
 	Reflect       *ReflectPayload    `json:"reflect_msg,omitempty"`