diff --git a/pepper-sync/CHANGELOG.md b/pepper-sync/CHANGELOG.md
index 39735bdf6c..29242a7010 100644
--- a/pepper-sync/CHANGELOG.md
+++ b/pepper-sync/CHANGELOG.md
@@ -20,6 +20,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ### Changed
 
+- `config::SyncConfig`:
+  - added `extended_zip212_grace_period` field.
+  - updated serialization to version 2 include `extended_zip212_grace_period` field
+
 ### Removed
 
 ## [0.3.0]
diff --git a/pepper-sync/src/config.rs b/pepper-sync/src/config.rs
index 5e0e6a5b25..391057e8cc 100644
--- a/pepper-sync/src/config.rs
+++ b/pepper-sync/src/config.rs
@@ -86,12 +86,16 @@ pub struct SyncConfig {
     pub transparent_address_discovery: TransparentAddressDiscovery,
     /// Performance level
     pub performance_level: PerformanceLevel,
+    /// Optionally extend the grace period to enable recovery of zecwalletlite funds.
+    /// <https://github.com/zcash/librustzcash/issues/323>
+    /// <https://github.com/adityapk00/librustzcash/commit/c31a04a4dbfa5a2ac013139db229f41cd421754d>
+    pub extended_zip212_grace_period: bool,
 }
 
 #[cfg(feature = "wallet_essentials")]
 impl SyncConfig {
     fn serialized_version() -> u8 {
-        1
+        2
     }
 
     /// Deserialize into `reader`
@@ -101,10 +105,16 @@ impl SyncConfig {
         let gap_limit = reader.read_u8()?;
         let scopes = reader.read_u8()?;
         let performance_level = if version >= 1 {
-            PerformanceLevel::read(reader)?
+            PerformanceLevel::read(&mut reader)?
         } else {
             PerformanceLevel::High
         };
+        let extended_zip212_grace_period = if version >= 2 {
+            reader.read_u8()? != 0
+        } else {
+            false
+        };
+
         Ok(Self {
             transparent_address_discovery: TransparentAddressDiscovery {
                 gap_limit,
@@ -115,6 +125,7 @@ impl SyncConfig {
                 },
             },
             performance_level,
+            extended_zip212_grace_period,
         })
     }
 
@@ -133,7 +144,8 @@ impl SyncConfig {
             scopes |= 0b100;
         }
         writer.write_u8(scopes)?;
-        self.performance_level.write(writer)?;
+        self.performance_level.write(&mut writer)?;
+        writer.write_u8(self.extended_zip212_grace_period as u8)?;
 
         Ok(())
     }
diff --git a/pepper-sync/src/scan.rs b/pepper-sync/src/scan.rs
index 09606f4aa5..de0870a789 100644
--- a/pepper-sync/src/scan.rs
+++ b/pepper-sync/src/scan.rs
@@ -117,6 +117,7 @@ pub(crate) async fn scan<P>(
     ufvks: &HashMap<AccountId, UnifiedFullViewingKey>,
     scan_task: ScanTask,
     max_batch_outputs: usize,
+    extended_zip212_grace_period: bool,
 ) -> Result<ScanResults, ScanError>
 where
     P: consensus::Parameters + Sync + Send + 'static,
@@ -182,6 +183,7 @@ where
             &ufvks_clone,
             initial_scan_data,
             max_batch_outputs / 8,
+            extended_zip212_grace_period,
         )
     })
     .await
diff --git a/pepper-sync/src/scan/compact_blocks.rs b/pepper-sync/src/scan/compact_blocks.rs
index 2d5a2bc409..40a390935b 100644
--- a/pepper-sync/src/scan/compact_blocks.rs
+++ b/pepper-sync/src/scan/compact_blocks.rs
@@ -38,6 +38,7 @@ pub(super) fn scan_compact_blocks<P>(
     ufvks: &HashMap<AccountId, UnifiedFullViewingKey>,
     initial_scan_data: InitialScanData,
     trial_decrypt_task_size: usize,
+    extended_zip212_grace_period: bool,
 ) -> Result<ScanData, ScanError>
 where
     P: consensus::Parameters + Sync + Send + 'static,
@@ -54,6 +55,7 @@ where
         &scanning_keys,
         &compact_blocks,
         trial_decrypt_task_size,
+        extended_zip212_grace_period,
     )?;
 
     let mut wallet_blocks: BTreeMap<BlockHeight, WalletBlock> = BTreeMap::new();
@@ -181,6 +183,7 @@ fn trial_decrypt<P>(
     scanning_keys: &ScanningKeys,
     compact_blocks: &[CompactBlock],
     trial_decrypt_task_size: usize,
+    extended_zip212_grace_period: bool,
 ) -> Result<BatchRunners<(), ()>, ScanError>
 where
     P: consensus::Parameters + Send + 'static,
@@ -188,7 +191,11 @@ where
     let mut runners = BatchRunners::<(), ()>::for_keys(trial_decrypt_task_size, scanning_keys);
     for block in compact_blocks {
         runners
-            .add_block(consensus_parameters, block.clone())
+            .add_block(
+                consensus_parameters,
+                block.clone(),
+                extended_zip212_grace_period,
+            )
             .map_err(ScanError::ZcbScanError)?;
     }
     runners.flush();
diff --git a/pepper-sync/src/scan/compact_blocks/runners.rs b/pepper-sync/src/scan/compact_blocks/runners.rs
index 7608d9e605..c4a77964ec 100644
--- a/pepper-sync/src/scan/compact_blocks/runners.rs
+++ b/pepper-sync/src/scan/compact_blocks/runners.rs
@@ -8,12 +8,14 @@ use std::sync::atomic::AtomicUsize;
 use crossbeam_channel as channel;
 
 use orchard::note_encryption::{CompactAction, OrchardDomain};
+use sapling_crypto::note_encryption::Zip212Enforcement;
 use sapling_crypto::note_encryption::{CompactOutputDescription, SaplingDomain};
 use zcash_client_backend::proto::compact_formats::CompactBlock;
 use zcash_note_encryption::{BatchDomain, COMPACT_NOTE_SIZE, Domain, ShieldedOutput, batch};
-use zcash_primitives::{
-    block::BlockHash, transaction::TxId, transaction::components::sapling::zip212_enforcement,
-};
+use zcash_primitives::{block::BlockHash, transaction::TxId};
+use zcash_protocol::consensus::BlockHeight;
+use zcash_protocol::consensus::NetworkUpgrade;
+use zcash_protocol::consensus::Parameters;
 use zcash_protocol::{ShieldedProtocol, consensus};
 
 use memuse::DynamicUsage;
@@ -23,6 +25,42 @@ use crate::keys::ScanningKeyOps as _;
 use crate::keys::ScanningKeys;
 use crate::wallet::OutputId;
 
+/// The "grace period" defined in [ZIP 212].
+///
+/// [ZIP 212]: <https://zips.z.cash/zip-0212#changes-to-the-process-of-receiving-sapling-or-orchard-notes>
+const ZIP212_GRACE_PERIOD: u32 = 32256;
+
+/// An extended grace period used by zecwalletlite and resulting in missing funds for zip212 conformant wallets.
+/// <https://github.com/adityapk00/librustzcash/commit/c31a04a4dbfa5a2ac013139db229f41cd421754d>
+const ZIP212_EXTENDED_GRACE_PERIOD: u32 = 32256 + 161280;
+
+/// Returns the enforcement policy for ZIP 212 at the given height.
+/// If `extended` is true, the grace window will be extended to enable recovery of zecwalletlite funds.
+/// https://github.com/zcash/librustzcash/issues/323
+fn zip212_enforcement(
+    params: &impl Parameters,
+    height: BlockHeight,
+    extended: bool,
+) -> Zip212Enforcement {
+    if params.is_nu_active(NetworkUpgrade::Canopy, height) {
+        let grace_period = if extended {
+            ZIP212_EXTENDED_GRACE_PERIOD
+        } else {
+            ZIP212_GRACE_PERIOD
+        };
+        let grace_period_end_height =
+            params.activation_height(NetworkUpgrade::Canopy).unwrap() + grace_period;
+
+        if height < grace_period_end_height {
+            Zip212Enforcement::GracePeriod
+        } else {
+            Zip212Enforcement::On
+        }
+    } else {
+        Zip212Enforcement::Off
+    }
+}
+
 type TaggedSaplingBatch = Batch<
     SaplingDomain,
     sapling_crypto::note_encryption::CompactOutputDescription,
@@ -85,13 +123,15 @@ where
         &mut self,
         params: &P,
         block: CompactBlock,
+        extended_zip212_grace_period: bool,
     ) -> Result<(), zcash_client_backend::scanning::ScanError>
     where
         P: consensus::Parameters + Send + 'static,
     {
         let block_hash = block.hash();
         let block_height = block.height();
-        let zip212_enforcement = zip212_enforcement(params, block_height);
+        let zip212_enforcement =
+            zip212_enforcement(params, block_height, extended_zip212_grace_period);
 
         for tx in block.vtx {
             let txid = tx.txid();
diff --git a/pepper-sync/src/scan/task.rs b/pepper-sync/src/scan/task.rs
index 7292425b91..7ed2f06399 100644
--- a/pepper-sync/src/scan/task.rs
+++ b/pepper-sync/src/scan/task.rs
@@ -66,6 +66,7 @@ pub(crate) struct Scanner<P> {
     fetch_request_sender: mpsc::UnboundedSender<FetchRequest>,
     consensus_parameters: P,
     ufvks: HashMap<AccountId, UnifiedFullViewingKey>,
+    extended_zip212_grace_period: bool,
 }
 
 impl<P> Scanner<P>
@@ -77,6 +78,7 @@ where
         scan_results_sender: mpsc::UnboundedSender<(ScanRange, Result<ScanResults, ScanError>)>,
         fetch_request_sender: mpsc::UnboundedSender<FetchRequest>,
         ufvks: HashMap<AccountId, UnifiedFullViewingKey>,
+        extended_zip212_grace_period: bool,
     ) -> Self {
         let workers: Vec<ScanWorker<P>> = Vec::with_capacity(MAX_WORKER_POOLSIZE);
 
@@ -89,6 +91,7 @@ where
             fetch_request_sender,
             consensus_parameters,
             ufvks,
+            extended_zip212_grace_period,
         }
     }
 
@@ -152,7 +155,7 @@ where
             self.fetch_request_sender.clone(),
             self.ufvks.clone(),
         );
-        worker.run(max_batch_outputs);
+        worker.run(max_batch_outputs, self.extended_zip212_grace_period);
         self.workers.push(worker);
         self.unique_id += 1;
     }
@@ -649,7 +652,7 @@ where
     /// Runs the worker in a new tokio task.
     ///
     /// Waits for a scan task and then calls [`crate::scan::scan`] on the given range.
-    fn run(&mut self, max_batch_outputs: usize) {
+    fn run(&mut self, max_batch_outputs: usize, extended_zip212_grace_period: bool) {
         let (scan_task_sender, mut scan_task_receiver) = mpsc::channel::<ScanTask>(1);
 
         let is_scanning = self.is_scanning.clone();
@@ -668,6 +671,7 @@ where
                     &ufvks,
                     scan_task,
                     max_batch_outputs,
+                    extended_zip212_grace_period,
                 );
 
                 let scan_results = match tokio::time::timeout(SCAN_TASK_TIMEOUT, scan_fut).await {
diff --git a/pepper-sync/src/sync.rs b/pepper-sync/src/sync.rs
index 5ea61ae8b0..3d474a177c 100644
--- a/pepper-sync/src/sync.rs
+++ b/pepper-sync/src/sync.rs
@@ -425,6 +425,7 @@ where
         scan_results_sender,
         fetch_request_sender.clone(),
         ufvks.clone(),
+        config.extended_zip212_grace_period,
     );
     scanner.launch(config.performance_level);
 
diff --git a/zingo-cli/src/lib.rs b/zingo-cli/src/lib.rs
index cfd277daee..a24c3ecef7 100644
--- a/zingo-cli/src/lib.rs
+++ b/zingo-cli/src/lib.rs
@@ -503,6 +503,7 @@ fn build_zingo_config(filled_template: &ConfigTemplate) -> std::io::Result<Clien
         sync_config: SyncConfig {
             transparent_address_discovery: TransparentAddressDiscovery::minimal(),
             performance_level: PerformanceLevel::High,
+            extended_zip212_grace_period: false,
         },
         min_confirmations: NonZeroU32::try_from(3).unwrap(),
     };
diff --git a/zingo-cli/src/tests.rs b/zingo-cli/src/tests.rs
index 9bbf0ecdc4..59076d39dd 100644
--- a/zingo-cli/src/tests.rs
+++ b/zingo-cli/src/tests.rs
@@ -656,6 +656,7 @@ mod config_template {
                         sync_config: SyncConfig {
                             transparent_address_discovery: TransparentAddressDiscovery::minimal(),
                             performance_level: PerformanceLevel::High,
+                            extended_zip212_grace_period: false,
                         },
                         min_confirmations: NonZeroU32::try_from(3).unwrap(),
                     },
diff --git a/zingolib/src/config.rs b/zingolib/src/config.rs
index e2515f705d..8ae9b10010 100644
--- a/zingolib/src/config.rs
+++ b/zingolib/src/config.rs
@@ -404,6 +404,7 @@ impl Default for ClientConfigBuilder {
                     sync_config: SyncConfig {
                         transparent_address_discovery: TransparentAddressDiscovery::minimal(),
                         performance_level: pepper_sync::config::PerformanceLevel::High,
+                        extended_zip212_grace_period: false,
                     },
                     min_confirmations: NonZeroU32::try_from(3)
                         .expect("hard coded non-zero integer"),
diff --git a/zingolib/src/testutils.rs b/zingolib/src/testutils.rs
index f239df2314..ab02d90357 100644
--- a/zingolib/src/testutils.rs
+++ b/zingolib/src/testutils.rs
@@ -40,6 +40,7 @@ pub fn default_test_wallet_settings() -> WalletSettings {
         sync_config: SyncConfig {
             transparent_address_discovery: TransparentAddressDiscovery::minimal(),
             performance_level: PerformanceLevel::High,
+            extended_zip212_grace_period: false,
         },
         min_confirmations: NonZeroU32::try_from(1).expect("hard-coded non-zero integer"),
     }
diff --git a/zingolib/src/wallet/disk.rs b/zingolib/src/wallet/disk.rs
index 7a824616ab..33e07ef670 100644
--- a/zingolib/src/wallet/disk.rs
+++ b/zingolib/src/wallet/disk.rs
@@ -351,6 +351,7 @@ impl LightWallet {
                 sync_config: SyncConfig {
                     transparent_address_discovery: TransparentAddressDiscovery::minimal(),
                     performance_level: PerformanceLevel::High,
+                    extended_zip212_grace_period: false,
                 },
                 min_confirmations: NonZeroU32::try_from(3).unwrap(),
             },
@@ -580,6 +581,7 @@ impl LightWallet {
                 sync_config: SyncConfig {
                     transparent_address_discovery: TransparentAddressDiscovery::minimal(),
                     performance_level: PerformanceLevel::High,
+                    extended_zip212_grace_period: false,
                 },
                 min_confirmations: NonZeroU32::try_from(3).unwrap(),
             }