diff --git a/Sources/ZcashLightClientKit/Block/CompactBlockProcessorNG.swift b/Sources/ZcashLightClientKit/Block/CompactBlockProcessorNG.swift
index e85198ed..55f5dfd6 100644
--- a/Sources/ZcashLightClientKit/Block/CompactBlockProcessorNG.swift
+++ b/Sources/ZcashLightClientKit/Block/CompactBlockProcessorNG.swift
@@ -18,18 +18,22 @@ class CompactBlockProcessorNG {
     private let actions: [CBPState: Action]
     private var context: ActionContext
 
-    private let metrics: SDKMetrics
+    private(set) var config: Configuration
+
+    private let accountRepository: AccountRepository
     private let blockDownloaderService: BlockDownloaderService
+    private let internalSyncProgress: InternalSyncProgress
     private let latestBlocksDataProvider: LatestBlocksDataProvider
+    private let logger: Logger
+    private let metrics: SDKMetrics
+    private let rustBackend: ZcashRustBackendWelding
     private let service: LightWalletService
     private let storage: CompactBlockRepository
     private let transactionRepository: TransactionRepository
-    private let accountRepository: AccountRepository
-    private let rustBackend: ZcashRustBackendWelding
-    private let logger: Logger
-    private let internalSyncProgress: InternalSyncProgress
 
-    private(set) var config: Configuration
+    private var retryAttempts: Int = 0
+    private var backoffTimer: Timer?
+    private var consecutiveChainValidationErrors: Int = 0
 
     /// Compact Block Processor configuration
     ///
@@ -156,7 +160,7 @@ class CompactBlockProcessorNG {
         )
     }
 
-    internal init(container: DIContainer, config: Configuration, accountRepository: AccountRepository) {
+    init(container: DIContainer, config: Configuration, accountRepository: AccountRepository) {
 //        Dependencies.setupCompactBlockProcessor(
 //            in: container,
 //            config: config,
@@ -355,17 +359,25 @@ extension CompactBlockProcessorNG {
                     await self?.update(progress: progress)
                 }
             } catch {
-                logger.error("Sync failed with error: \(error)")
-
                 if Task.isCancelled {
-                    logger.info("Processing cancelled.")
+                    logger.info("Sync cancelled.")
                     await syncStopped()
+                    break
                 } else {
                     if case let ZcashError.rustValidateCombinedChainInvalidChain(height) = error {
-                        await validationFailed(at: BlockHeight(height))
+                        logger.error("Sync failed because of validation error: \(error)")
+                        do {
+                            try await validationFailed(at: BlockHeight(height))
+                            // Start sync all over again
+                            await context.update(state: .validateServer)
+                        } catch {
+                            await failure(error)
+                            break
+                        }
                     } else {
-                        logger.error("processing failed with error: \(error)")
-                        await fail(error)
+                        logger.error("Sync failed with error: \(error)")
+                        await failure(error)
+                        break
                     }
                 }
             }
@@ -392,12 +404,43 @@ extension CompactBlockProcessorNG {
         // await handleAfterSyncHooks()
     }
 
-    func validationFailed(at height: BlockHeight) async {
-        // handle validation failure
+    func validationFailed(at height: BlockHeight) async throws {
+        // cancel all Tasks
+        syncTask?.cancel()
+//        await blockDownloader.stopDownload()
+
+        // rewind
+        let rewindHeight = determineLowerBound(
+            errorHeight: height,
+            consecutiveErrors: consecutiveChainValidationErrors,
+            walletBirthday: config.walletBirthday
+        )
+
+        consecutiveChainValidationErrors += 1
+
+        try await rustBackend.rewindToHeight(height: Int32(rewindHeight))
+
+        try await blockDownloaderService.rewind(to: rewindHeight)
+        await internalSyncProgress.rewind(to: rewindHeight)
+
+        await send(event: .handledReorg(height, rewindHeight))
     }
 
-    func fail(_ error: Error) async {
-        // handle failure
+    func failure(_ error: Error) async {
+        await context.update(state: .failed)
+
+        logger.error("Fail with error: \(error)")
+        syncTask?.cancel()
+        backoffTimer?.invalidate()
+        backoffTimer = nil
+//        await blockDownloader.stopDownload()
+        self.retryAttempts += 1
+        await send(event: .failed(error))
+
+        // don't set a new timer if there are no more attempts.
+        if hasRetryAttempt() {
+//            await self.setTimer()
+        }
     }
 }
 
@@ -413,4 +456,13 @@ extension CompactBlockProcessorNG {
             return false
         }
     }
+
+    func hasRetryAttempt() -> Bool {
+        retryAttempts < config.retries
+    }
+
+    func determineLowerBound(errorHeight: Int, consecutiveErrors: Int, walletBirthday: BlockHeight) -> BlockHeight {
+        let offset = min(ZcashSDK.maxReorgSize, ZcashSDK.defaultRewindDistance * (consecutiveErrors + 1))
+        return max(errorHeight - offset, walletBirthday - ZcashSDK.maxReorgSize)
+    }
 }