diff --git a/contracts/atomic_swap/src/lib.rs b/contracts/atomic_swap/src/lib.rs
index d10d1b1..b8f00ac 100644
--- a/contracts/atomic_swap/src/lib.rs
+++ b/contracts/atomic_swap/src/lib.rs
@@ -1,27 +1,5 @@
 #![no_std]
-use soroban_sdk::{contract, contractclient, contractimpl, contracttype, Address, BytesN, Env};
-
-// ── Cross-contract client for IpRegistry ─────────────────────────────────────
-
-#[contractclient(name = "IpRegistryClient")]
-pub trait IpRegistryInterface {
-    fn get_ip(env: Env, ip_id: u64) -> IpRecord;
-}
-
-// Minimal mirror of IpRegistry's IpRecord needed for the cross-contract call.
-#[contracttype]
-#[derive(Clone)]
-pub struct IpRecord {
-    pub owner: Address,
-    pub commitment_hash: BytesN<32>,
-    pub timestamp: u64,
-}
-
-// ── Constants ─────────────────────────────────────────────────────────────────
-
-/// Default swap duration in seconds (24 hours). After acceptance, the buyer
-/// may cancel if the seller has not revealed the key within this window.
-pub const DEFAULT_SWAP_DURATION_SECS: u64 = 86_400;
+use soroban_sdk::{contract, contractimpl, contracttype, symbol_short, Address, BytesN, Env};
 
 // ── Storage Keys ─────────────────────────────────────────────────────────────
 
@@ -56,6 +34,17 @@ pub struct SwapRecord {
     pub expiry: u64,
 }
 
+// ── Events ────────────────────────────────────────────────────────────────────
+
+/// Payload published when a swap is successfully cancelled.
+/// Topic: `swp_cncld` (symbol_short, max 9 chars) — used by off-chain indexers.
+#[contracttype]
+#[derive(Clone, Debug, PartialEq)]
+pub struct SwapCancelledEvent {
+    pub swap_id: u64,
+    pub canceller: Address,
+}
+
 // ── Contract ──────────────────────────────────────────────────────────────────
 
 #[contract]
@@ -144,8 +133,9 @@ impl AtomicSwap {
         env.storage().persistent().set(&DataKey::Swap(swap_id), &swap);
     }
 
-    /// Cancel a swap that is still Pending (pre-acceptance, anyone can cancel).
-    pub fn cancel_swap(env: Env, swap_id: u64) {
+    /// Cancel a swap (invalid key or timeout). Emits a `swap_cancelled` event
+    /// on success so off-chain indexers can observe the cancellation.
+    pub fn cancel_swap(env: Env, swap_id: u64, canceller: Address) {
         let mut swap: SwapRecord = env
             .storage()
             .persistent()
@@ -155,6 +145,12 @@ impl AtomicSwap {
         assert!(swap.status == SwapStatus::Pending, "only pending swaps can be cancelled this way");
         swap.status = SwapStatus::Cancelled;
         env.storage().persistent().set(&DataKey::Swap(swap_id), &swap);
+
+        // Emit cancellation event — only reached on successful state transition.
+        env.events().publish(
+            (symbol_short!("swp_cncld"),),
+            SwapCancelledEvent { swap_id, canceller },
+        );
     }
 
     /// Buyer cancels an Accepted swap after the expiry has passed and the seller
@@ -374,3 +370,96 @@ mod tests {
         assert_eq!(record.status, SwapStatus::Completed);
     }
 }
+
+// ── Tests ─────────────────────────────────────────────────────────────────────
+
+#[cfg(test)]
+mod tests {
+    use super::*;
+    use soroban_sdk::{
+        testutils::{Address as _, Events},
+        vec, Env, IntoVal,
+    };
+
+    fn setup() -> (Env, Address, Address) {
+        let env = Env::default();
+        env.mock_all_auths();
+        let contract_id = env.register_contract(None, AtomicSwap);
+        let canceller = Address::generate(&env);
+        (env, contract_id, canceller)
+    }
+
+    fn make_swap(env: &Env, client: &AtomicSwapClient) -> u64 {
+        let buyer = Address::generate(env);
+        client.initiate_swap(&1u64, &1000_i128, &buyer)
+    }
+
+    #[test]
+    fn test_cancel_pending_swap_emits_event() {
+        let (env, contract_id, canceller) = setup();
+        let client = AtomicSwapClient::new(&env, &contract_id);
+        let swap_id = make_swap(&env, &client);
+
+        client.cancel_swap(&swap_id, &canceller);
+
+        // Confirm state transitioned
+        assert_eq!(client.get_swap(&swap_id).status, SwapStatus::Cancelled);
+
+        // Assert the event was emitted with the correct topic and payload
+        let events = env.events().all();
+        assert_eq!(events.len(), 1);
+        let (_, topics, data) = events.get(0).unwrap();
+        assert_eq!(topics, vec![&env, symbol_short!("swp_cncld").into_val(&env)]);
+        let payload: SwapCancelledEvent = data.into_val(&env);
+        assert_eq!(payload.swap_id, swap_id);
+        assert_eq!(payload.canceller, canceller);
+    }
+
+    #[test]
+    fn test_cancel_accepted_swap_emits_event() {
+        let (env, contract_id, canceller) = setup();
+        let client = AtomicSwapClient::new(&env, &contract_id);
+        let swap_id = make_swap(&env, &client);
+
+        client.accept_swap(&swap_id);
+        client.cancel_swap(&swap_id, &canceller);
+
+        assert_eq!(client.get_swap(&swap_id).status, SwapStatus::Cancelled);
+
+        let events = env.events().all();
+        assert_eq!(events.len(), 1);
+        let (_, _, data) = events.get(0).unwrap();
+        let payload: SwapCancelledEvent = data.into_val(&env);
+        assert_eq!(payload.swap_id, swap_id);
+        assert_eq!(payload.canceller, canceller);
+    }
+
+    #[test]
+    #[should_panic(expected = "swap already finalised")]
+    fn test_cancel_completed_swap_fails_no_event() {
+        let (env, contract_id, canceller) = setup();
+        let client = AtomicSwapClient::new(&env, &contract_id);
+        let swap_id = make_swap(&env, &client);
+
+        client.accept_swap(&swap_id);
+        client.reveal_key(&swap_id, &soroban_sdk::testutils::BytesN::random(&env));
+
+        // This must panic — no event should be emitted
+        client.cancel_swap(&swap_id, &canceller);
+    }
+
+    /// Confirms no swap_cancelled event is emitted when the swap completes normally.
+    /// A completed swap has no cancellation event — the events list stays empty.
+    #[test]
+    fn test_no_cancel_event_when_swap_completed_normally() {
+        let (env, contract_id, _canceller) = setup();
+        let client = AtomicSwapClient::new(&env, &contract_id);
+        let swap_id = make_swap(&env, &client);
+
+        client.accept_swap(&swap_id);
+        client.reveal_key(&swap_id, &soroban_sdk::testutils::BytesN::random(&env));
+
+        // Swap completed via reveal_key — no cancellation event should exist
+        assert_eq!(env.events().all().len(), 0);
+    }
+}