diff --git a/neo.UnitTests/Network/P2P/Payloads/UT_Transaction.cs b/neo.UnitTests/Network/P2P/Payloads/UT_Transaction.cs
index fc32744b96..615fa6da1d 100644
--- a/neo.UnitTests/Network/P2P/Payloads/UT_Transaction.cs
+++ b/neo.UnitTests/Network/P2P/Payloads/UT_Transaction.cs
@@ -1069,5 +1069,134 @@ public void ToJson()
             jObj["script"].AsString().Should().Be("4220202020202020202020202020202020202020202020202020202020202020");
             jObj["sys_fee"].AsString().Should().Be("4200000000");
         }
+
+        [TestMethod]
+        public void Infinite_Loop_Not_Allowed_On_Application()
+        {
+            byte[] script;
+            using (ScriptBuilder sb = new ScriptBuilder())
+            {
+                sb.Emit(OpCode.JMP, new byte[] { 0, 0, 0, 0 });
+                script = sb.ToArray();
+            }
+
+            long netfee = 100000000; // network fee
+
+            // Check Application
+            long appGas = 0;
+            using (ApplicationEngine engine = new ApplicationEngine(TriggerType.Application, null, null, netfee, false))
+            {
+                engine.LoadScript(script);
+                Assert.AreEqual(VMState.FAULT, engine.Execute());
+                Assert.AreEqual(0, engine.ResultStack.Count);
+                appGas += engine.GasConsumed;
+            }
+
+            // many gas are spent before fault
+            Assert.AreEqual(appGas, 100000040);
+        }
+
+        [TestMethod]
+        public void Infinite_Loop_Not_Allowed_On_Verification()
+        {
+            byte[] script;
+            using (ScriptBuilder sb = new ScriptBuilder())
+            {
+                sb.Emit(OpCode.JMP, new byte[] { 0, 0, 0, 0 });
+                script = sb.ToArray();
+            }
+
+            long netfee = 100000000; // network fee
+
+            // Check Verification
+            long verificationGas = 0;
+            using (ApplicationEngine engine = new ApplicationEngine(TriggerType.Verification, null, null, netfee, false))
+            {
+                engine.LoadScript(script);
+                Assert.AreEqual(VMState.FAULT, engine.Execute());
+                Assert.AreEqual(0, engine.ResultStack.Count);
+                verificationGas += engine.GasConsumed;
+            }
+
+            // no gas is spent (backwards jump is not allowed)
+            Assert.AreEqual(verificationGas, 0);
+        }
+
+        [TestMethod]
+        public void Recursion_Not_Allowed_On_Application()
+        {
+            // example for recursion (no local variables or parameters)
+            /*
+            00 11: PUSH0  #An empty array of bytes is pushed onto the stack
+            c5 12: NEWARRAY  #
+            6b 13: TOALTSTACK  # Puts the input onto the top of the alt stack. Removes it from the main stack.
+            61 14: NOP  # Does nothing.
+            65 15: CALL fcff # -4
+            61 18: NOP  # Does nothing.
+            6c 19: FROMALTSTACK  # Puts the input onto the top of the main stack. Removes it from the alt stack.
+            75 20: DROP  # Removes the top stack item.
+            66 21: RET  #
+            */
+
+            byte[] script;
+            using (ScriptBuilder sb = new ScriptBuilder())
+            {
+                sb.Emit(OpCode.CALL, new byte[] { 0, 0, 0, 0 });
+                script = sb.ToArray();
+            }
+
+            long netfee = 100000000; // network fee
+
+            // Check Application
+            long appGas = 0;
+            using (ApplicationEngine engine = new ApplicationEngine(TriggerType.Application, null, null, netfee, false))
+            {
+                engine.LoadScript(script);
+                Assert.AreEqual(VMState.FAULT, engine.Execute());
+                Assert.AreEqual(0, engine.ResultStack.Count);
+                appGas += engine.GasConsumed;
+            }
+            // many gas are spent before fault
+            Assert.AreEqual(appGas, 22528000);
+        }
+
+        [TestMethod]
+        public void Recursion_Not_Allowed_On_Verification()
+        {
+            // example for recursion (no local variables or parameters)
+            /*
+            00 11: PUSH0  #An empty array of bytes is pushed onto the stack
+            c5 12: NEWARRAY  #
+            6b 13: TOALTSTACK  # Puts the input onto the top of the alt stack. Removes it from the main stack.
+            61 14: NOP  # Does nothing.
+            65 15: CALL fcff # -4
+            61 18: NOP  # Does nothing.
+            6c 19: FROMALTSTACK  # Puts the input onto the top of the main stack. Removes it from the alt stack.
+            75 20: DROP  # Removes the top stack item.
+            66 21: RET  #
+            */
+
+            byte[] script;
+            using (ScriptBuilder sb = new ScriptBuilder())
+            {
+                sb.Emit(OpCode.CALL, new byte[] { 0, 0, 0, 0 });
+                script = sb.ToArray();
+            }
+
+            long netfee = 100000000; // network fee
+
+            // Check Verification
+            long verificationGas = 0;
+            using (ApplicationEngine engine = new ApplicationEngine(TriggerType.Verification, null, null, netfee, false))
+            {
+                engine.LoadScript(script);
+                Assert.AreEqual(VMState.FAULT, engine.Execute());
+                Assert.AreEqual(0, engine.ResultStack.Count);
+                verificationGas += engine.GasConsumed;
+            }
+            // no gas should be spent (recursion is not allowed)
+            // TODO: fix recursion
+            Assert.AreEqual(verificationGas, 22528000);
+        }
     }
 }
diff --git a/neo/SmartContract/ApplicationEngine.cs b/neo/SmartContract/ApplicationEngine.cs
index 2eeeef52e0..7129190d8c 100644
--- a/neo/SmartContract/ApplicationEngine.cs
+++ b/neo/SmartContract/ApplicationEngine.cs
@@ -80,7 +80,30 @@ protected override bool PreExecuteInstruction()
         {
             if (CurrentContext.InstructionPointer >= CurrentContext.Script.Length)
                 return true;
-            return AddGas(OpCodePrices[CurrentContext.CurrentInstruction.OpCode]);
+
+            Instruction instruction = CurrentContext.CurrentInstruction;
+
+            if (Trigger == TriggerType.Verification)
+            {
+                // no backwards jump in verification mode
+
+                switch (instruction.OpCode)
+                {
+                    case OpCode.JMP:
+                    case OpCode.JMPIF:
+                    case OpCode.JMPIFNOT:
+                        //case OpCode.CALL:
+                        {
+                            if (instruction.TokenI16 <= 0)
+                            {
+                                return false;
+                            }
+                            break;
+                        }
+                }
+            }
+
+            return AddGas(OpCodePrices[instruction.OpCode]);
         }
 
         private static Block CreateDummyBlock(Snapshot snapshot)