diff --git a/CHANGELOG.md b/CHANGELOG.md
index f04ae2531..8046b5375 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -39,6 +39,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 
 ### Bug Fixes
 
+* [#11796](https://github.com/cosmos/cosmos-sdk/pull/11796) Handle EOF error case in `readLineFromBuf`, which allows successful reading of passphrases from STDIN.
 * [\#11772](https://github.com/cosmos/cosmos-sdk/pull/11772) Limit types.Dec length to avoid overflow.
 
 ## [v0.45.4](https://github.com/cosmos/cosmos-sdk/releases/tag/v0.45.4) - 2022-04-25
diff --git a/client/input/input.go b/client/input/input.go
index 57b04b401..5afaabf30 100644
--- a/client/input/input.go
+++ b/client/input/input.go
@@ -2,6 +2,7 @@ package input
 
 import (
 	"bufio"
+	"errors"
 	"fmt"
 	"io"
 	"os"
@@ -83,12 +84,25 @@ func inputIsTty() bool {
 	return isatty.IsTerminal(os.Stdin.Fd()) || isatty.IsCygwinTerminal(os.Stdin.Fd())
 }
 
-// readLineFromBuf reads one line from stdin.
+// readLineFromBuf reads one line from reader.
 // Subsequent calls reuse the same buffer, so we don't lose
 // any input when reading a password twice (to verify)
 func readLineFromBuf(buf *bufio.Reader) (string, error) {
 	pass, err := buf.ReadString('\n')
-	if err != nil {
+
+	switch {
+	case errors.Is(err, io.EOF):
+		// If by any chance the error is EOF, but we were actually able to read
+		// something from the reader then don't return the EOF error.
+		// If we didn't read anything from the reader and got the EOF error, then
+		// it's safe to return EOF back to the caller.
+		if len(pass) > 0 {
+			// exit the switch statement
+			break
+		}
+		return "", err
+
+	case err != nil:
 		return "", err
 	}
 
diff --git a/client/input/input_test.go b/client/input/input_test.go
new file mode 100644
index 000000000..9e85eb256
--- /dev/null
+++ b/client/input/input_test.go
@@ -0,0 +1,57 @@
+package input
+
+import (
+	"bufio"
+	"errors"
+	"io"
+	"testing"
+
+	"github.com/stretchr/testify/require"
+)
+
+type fakeReader struct {
+	fnc func(p []byte) (int, error)
+}
+
+func (f fakeReader) Read(p []byte) (int, error) {
+	return f.fnc(p)
+}
+
+var _ io.Reader = fakeReader{}
+
+func TestReadLineFromBuf(t *testing.T) {
+	var fr fakeReader
+
+	t.Run("it correctly returns the password when reader returns EOF", func(t *testing.T) {
+		fr.fnc = func(p []byte) (int, error) {
+			return copy(p, []byte("hello")), io.EOF
+		}
+		buf := bufio.NewReader(fr)
+
+		pass, err := readLineFromBuf(buf)
+		require.NoError(t, err)
+		require.Equal(t, "hello", pass)
+	})
+
+	t.Run("it returns EOF if reader has been exhausted", func(t *testing.T) {
+		fr.fnc = func(p []byte) (int, error) {
+			return 0, io.EOF
+		}
+		buf := bufio.NewReader(fr)
+
+		_, err := readLineFromBuf(buf)
+		require.ErrorIs(t, err, io.EOF)
+	})
+
+	t.Run("it returns the error if it's not EOF regardles if it read something or not", func(t *testing.T) {
+		expectedErr := errors.New("oh no")
+		fr.fnc = func(p []byte) (int, error) {
+			return copy(p, []byte("hello")), expectedErr
+		}
+		buf := bufio.NewReader(fr)
+
+		_, err := readLineFromBuf(buf)
+		require.ErrorIs(t, err, expectedErr)
+	})
+
+}