diff --git a/substrate/node/runtime/src/lib.rs b/substrate/node/runtime/src/lib.rs
index 6ef50ef61f..1f52620cd4 100644
--- a/substrate/node/runtime/src/lib.rs
+++ b/substrate/node/runtime/src/lib.rs
@@ -59,7 +59,7 @@ pub const VERSION: RuntimeVersion = RuntimeVersion {
 	impl_name: create_runtime_str!("substrate-node"),
 	authoring_version: 10,
 	spec_version: 38,
-	impl_version: 38,
+	impl_version: 39,
 	apis: RUNTIME_API_VERSIONS,
 };
 
diff --git a/substrate/node/runtime/wasm/target/wasm32-unknown-unknown/release/node_runtime.compact.wasm b/substrate/node/runtime/wasm/target/wasm32-unknown-unknown/release/node_runtime.compact.wasm
index 22b953faab..446e9eaad9 100644
Binary files a/substrate/node/runtime/wasm/target/wasm32-unknown-unknown/release/node_runtime.compact.wasm and b/substrate/node/runtime/wasm/target/wasm32-unknown-unknown/release/node_runtime.compact.wasm differ
diff --git a/substrate/srml/balances/src/lib.rs b/substrate/srml/balances/src/lib.rs
index 8eee7ad130..775d83e33b 100644
--- a/substrate/srml/balances/src/lib.rs
+++ b/substrate/srml/balances/src/lib.rs
@@ -283,8 +283,9 @@ impl<T: Trait<I>, I: Instance> Module<T, I> {
 	/// NOTE: LOW-LEVEL: This will not attempt to maintain total issuance. It is expected that
 	/// the caller will do this.
 	fn set_free_balance(who: &T::AccountId, balance: T::Balance) -> UpdateBalanceOutcome {
-		// Commented out for no - but consider it instructive.
+		// Commented out for now - but consider it instructive.
 		// assert!(!Self::total_balance(who).is_zero());
+		// assert!(Self::free_balance(who) > Self::existential_deposit());
 		if balance < Self::existential_deposit() {
 			<FreeBalance<T, I>>::insert(who, balance);
 			Self::on_free_too_low(who);
@@ -657,6 +658,19 @@ where
 		UpdateBalanceOutcome
 	) {
 		let original = Self::free_balance(who);
+		if balance < Self::existential_deposit() && original.is_zero() {
+			// If we're attempting to set an existing account to less than ED, then
+			// bypass the entire operation. It's a no-op if you follow it through, but
+			// since this is an instance where we might account for a negative imbalance
+			// (in the dust cleaner of set_free_balance) before we account for its actual
+			// equal and opposite cause (returned as an Imbalance), then in the
+			// instance that there's no other accounts on the system at all, we might
+			// underflow the issuance and our arithmetic will be off.
+			return (
+				SignedImbalance::Positive(Self::PositiveImbalance::zero()),
+				UpdateBalanceOutcome::AccountKilled,
+			)
+		}
 		let imbalance = if original <= balance {
 			SignedImbalance::Positive(PositiveImbalance(balance - original))
 		} else {
diff --git a/substrate/srml/balances/src/tests.rs b/substrate/srml/balances/src/tests.rs
index 802f184aca..123a04524e 100644
--- a/substrate/srml/balances/src/tests.rs
+++ b/substrate/srml/balances/src/tests.rs
@@ -440,6 +440,36 @@ fn transferring_too_high_value_should_not_panic() {
 	});
 }
 
+#[test]
+fn account_create_on_free_too_low_with_other() {
+	with_externalities(
+		&mut ExtBuilder::default().existential_deposit(100).build(),
+		|| {
+			let _ = Balances::deposit_creating(&1, 100);
+			assert_eq!(<TotalIssuance<Runtime>>::get(), 100);
+
+			// No-op.
+			let _ = Balances::deposit_creating(&2, 50);
+			assert_eq!(Balances::free_balance(&2), 0);
+			assert_eq!(<TotalIssuance<Runtime>>::get(), 100);
+		}
+	)
+}
+
+
+#[test]
+fn account_create_on_free_too_low() {
+	with_externalities(
+		&mut ExtBuilder::default().existential_deposit(100).build(),
+		|| {
+			// No-op.
+			let _ = Balances::deposit_creating(&2, 50);
+			assert_eq!(Balances::free_balance(&2), 0);
+			assert_eq!(<TotalIssuance<Runtime>>::get(), 0);
+		}
+	)
+}
+
 #[test]
 fn account_removal_on_free_too_low() {
 	with_externalities(