diff --git a/packages/transaction-controller/CHANGELOG.md b/packages/transaction-controller/CHANGELOG.md
index a6351b05d3..3596dabb36 100644
--- a/packages/transaction-controller/CHANGELOG.md
+++ b/packages/transaction-controller/CHANGELOG.md
@@ -11,6 +11,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 - Bump `@metamask/accounts-controller` from `^39.0.2` to `^39.0.3` ([#9231](https://github.com/MetaMask/core/pull/9231))
 
+### Fixed
+
+- Add explicit error when submitting a batch that requires EIP-7702 but the account or chain does not support it ([#9240](https://github.com/MetaMask/core/pull/9240))
+
 ## [68.1.1]
 
 ### Changed
diff --git a/packages/transaction-controller/src/utils/batch.test.ts b/packages/transaction-controller/src/utils/batch.test.ts
index e6527ffd73..d0bdf8c06e 100644
--- a/packages/transaction-controller/src/utils/batch.test.ts
+++ b/packages/transaction-controller/src/utils/batch.test.ts
@@ -630,6 +630,48 @@ describe('Batch Utils', () => {
       ).toBe(TransactionType.bridgeApproval);
     });
 
+    it('throws if EIP-7702 is required but the account does not support it', async () => {
+      const publishBatchHook: jest.MockedFn<PublishBatchHook> = jest.fn();
+
+      doesAccountSupportEIP7702Mock.mockReturnValueOnce(false);
+
+      await expect(
+        addTransactionBatch({
+          ...request,
+          publishBatchHook,
+          request: {
+            ...request.request,
+            disableHook: true,
+            disableSequential: true,
+          },
+        }),
+      ).rejects.toThrow('Account does not support EIP-7702');
+
+      expect(addTransactionMock).not.toHaveBeenCalled();
+      expect(publishBatchHook).not.toHaveBeenCalled();
+    });
+
+    it('throws if EIP-7702 is required but the chain does not support it', async () => {
+      const publishBatchHook: jest.MockedFn<PublishBatchHook> = jest.fn();
+
+      doesChainSupportEIP7702Mock.mockReturnValueOnce(false);
+
+      await expect(
+        addTransactionBatch({
+          ...request,
+          publishBatchHook,
+          request: {
+            ...request.request,
+            disableHook: true,
+            disableSequential: true,
+          },
+        }),
+      ).rejects.toThrow('Chain does not support EIP-7702');
+
+      expect(addTransactionMock).not.toHaveBeenCalled();
+      expect(publishBatchHook).not.toHaveBeenCalled();
+    });
+
     it('returns provided batch ID', async () => {
       isAccountUpgradedToEIP7702Mock.mockResolvedValueOnce({
         delegationAddress: undefined,
diff --git a/packages/transaction-controller/src/utils/batch.ts b/packages/transaction-controller/src/utils/batch.ts
index c5a2017460..26592ff057 100644
--- a/packages/transaction-controller/src/utils/batch.ts
+++ b/packages/transaction-controller/src/utils/batch.ts
@@ -127,6 +127,10 @@ export async function addTransactionBatch(
     messenger,
     request: transactionBatchRequest,
   } = request;
+
+  const { disableHook, disable7702, disableSequential } =
+    transactionBatchRequest;
+
   const sizeLimit = getBatchSizeLimit(messenger);
 
   validateBatchRequest({
@@ -143,7 +147,11 @@ export async function addTransactionBatch(
     transactionBatchRequest.from,
   );
 
-  if (!transactionBatchRequest.disable7702 && accountCanUse7702) {
+  if (disableHook && disableSequential && !disable7702 && !accountCanUse7702) {
+    throw rpcErrors.internal('Account does not support EIP-7702');
+  }
+
+  if (!disable7702 && accountCanUse7702) {
     try {
       return await addTransactionBatchWith7702(request);
     } catch (error: unknown) {
@@ -151,7 +159,7 @@ export async function addTransactionBatch(
         error instanceof JsonRpcError &&
         error.message === 'Chain does not support EIP-7702';
 
-      if (!isEIP7702NotSupportedError) {
+      if (!isEIP7702NotSupportedError || (disableHook && disableSequential)) {
         throw error;
       }
     }
diff --git a/packages/transaction-pay-controller/CHANGELOG.md b/packages/transaction-pay-controller/CHANGELOG.md
index 8512fc65d4..c575ca29f4 100644
--- a/packages/transaction-pay-controller/CHANGELOG.md
+++ b/packages/transaction-pay-controller/CHANGELOG.md
@@ -11,6 +11,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 - Bump `@metamask/assets-controllers` from `^109.2.1` to `^109.2.2` ([#9231](https://github.com/MetaMask/core/pull/9231))
 
+### Fixed
+
+- Require EIP-7702 for direct mUSD vault deposits and ensure transaction ID collection always stops after the batch attempt ([#9240](https://github.com/MetaMask/core/pull/9240))
+
 ## [23.14.0]
 
 ### Changed
diff --git a/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.test.ts b/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.test.ts
index 68e08b5dc0..b69b25e271 100644
--- a/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.test.ts
+++ b/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.test.ts
@@ -464,7 +464,8 @@ describe('fiat-direct-musd', () => {
       ).rejects.toThrow('Missing nested transactions');
     });
 
-    it('prefixes addTransactionBatch errors with Vault', async () => {
+    it('prefixes addTransactionBatch errors with Vault and stops collecting transaction IDs', async () => {
+      const endMock = jest.fn();
       const callMock = jest.fn((action: string) => {
         if (action === 'TransactionPayController:getAmountData') {
           return Promise.resolve({
@@ -478,6 +479,7 @@ describe('fiat-direct-musd', () => {
 
         throw new Error(`Unexpected action: ${action}`);
       });
+      collectTransactionIdsMock.mockReturnValue({ end: endMock });
 
       await expect(
         submitDirectMusdVaultDeposit({
@@ -486,6 +488,7 @@ describe('fiat-direct-musd', () => {
           transaction: TRANSACTION_MOCK,
         }),
       ).rejects.toThrow('Vault: batch failed');
+      expect(endMock).toHaveBeenCalledTimes(1);
     });
 
     it('throws when no vault transactions are collected', async () => {
diff --git a/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.ts b/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.ts
index 9fedef9202..6c75bb26cd 100644
--- a/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.ts
+++ b/packages/transaction-pay-controller/src/strategy/fiat/fiat-direct-musd.ts
@@ -286,6 +286,8 @@ export async function submitDirectMusdVaultDeposit({
 
   try {
     await messenger.call('TransactionController:addTransactionBatch', {
+      disableHook: true,
+      disableSequential: true,
       from: moneyAccountAddress,
       isGasFeeSponsored: true,
       isInternal: true,
@@ -306,10 +308,10 @@ export async function submitDirectMusdVaultDeposit({
     });
   } catch (error) {
     throw prefixError(error, VAULT_ERROR_PREFIX);
+  } finally {
+    end();
   }
 
-  end();
-
   log('Submitted direct mUSD vault deposit', {
     moneyAccountAddress,
     nestedTransactionCount: nestedTransactions.length,