diff --git a/cli/CHANGELOG.md b/cli/CHANGELOG.md
index 42f8e1d971..0c50c27bcd 100644
--- a/cli/CHANGELOG.md
+++ b/cli/CHANGELOG.md
@@ -29,6 +29,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 - `Account::switch` command to allow changing accounts quickly;
 - UX improvements (Ctrl+l, TAB completion/suggestions and more) during interactive account management;
 - `WalletCommand::SetPow` command;
+- Check for existing stronghold on `restore`;
 
 ### Changed
 
diff --git a/cli/src/command/wallet.rs b/cli/src/command/wallet.rs
index 605baee51e..7d4c26f5a5 100644
--- a/cli/src/command/wallet.rs
+++ b/cli/src/command/wallet.rs
@@ -247,14 +247,22 @@ pub async fn node_info_command(storage_path: &Path) -> Result<Wallet, Error> {
 pub async fn restore_command(storage_path: &Path, snapshot_path: &Path, backup_path: &Path) -> Result<Wallet, Error> {
     check_file_exists(backup_path).await?;
 
-    let password = get_password("Stronghold password", false)?;
-    let secret_manager = SecretManager::Stronghold(
-        StrongholdSecretManager::builder()
-            .password(password.clone())
-            .build(snapshot_path)?,
-    );
-    let wallet = Wallet::builder()
-        .with_secret_manager(secret_manager)
+    let mut builder = Wallet::builder();
+    if check_file_exists(snapshot_path).await.is_ok() {
+        println!(
+            "Detected a stronghold file at {}. Enter password to unlock:",
+            snapshot_path.to_str().unwrap()
+        );
+        let password = get_password("Stronghold password", false)?;
+        let secret_manager = SecretManager::Stronghold(
+            StrongholdSecretManager::builder()
+                .password(password.clone())
+                .build(snapshot_path)?,
+        );
+        builder = builder.with_secret_manager(secret_manager);
+    }
+
+    let wallet = builder
         // Will be overwritten by the backup's value.
         .with_client_options(ClientOptions::new().with_node(DEFAULT_NODE_URL)?)
         .with_storage_path(storage_path.to_str().expect("invalid unicode"))
@@ -263,6 +271,7 @@ pub async fn restore_command(storage_path: &Path, snapshot_path: &Path, backup_p
         .finish()
         .await?;
 
+    let password = get_password("Stronghold backup password", false)?;
     wallet.restore_backup(backup_path.into(), password, None, None).await?;
 
     println_log_info!(
diff --git a/sdk/src/client/stronghold/mod.rs b/sdk/src/client/stronghold/mod.rs
index 7cd0552567..f91b41a3b7 100644
--- a/sdk/src/client/stronghold/mod.rs
+++ b/sdk/src/client/stronghold/mod.rs
@@ -182,6 +182,16 @@ impl StrongholdAdapterBuilder {
     /// [`password()`]: Self::password()
     /// [`timeout()`]: Self::timeout()
     pub fn build<P: AsRef<Path>>(self, snapshot_path: P) -> Result<StrongholdAdapter, Error> {
+        if snapshot_path.as_ref().is_dir() {
+            // TODO: Add Error in 2.0 as its breaking.
+            // Issue #1197
+            return Err(std::io::Error::new(
+                std::io::ErrorKind::Other,
+                format!("Path is not a file: {:?}", snapshot_path.as_ref().to_path_buf()),
+            )
+            .into());
+        }
+
         // In any case, Stronghold - as a necessary component - needs to be present at this point.
         let stronghold = self.stronghold.unwrap_or_default();
 
@@ -484,6 +494,16 @@ impl StrongholdAdapter {
     ///
     /// [`unload_stronghold_snapshot()`]: Self::unload_stronghold_snapshot()
     pub async fn write_stronghold_snapshot(&self, snapshot_path: Option<&Path>) -> Result<(), Error> {
+        if let Some(p) = snapshot_path {
+            if p.is_dir() {
+                // TODO: Add Error in 2.0 as its breaking.
+                // Issue #1197
+                return Err(
+                    std::io::Error::new(std::io::ErrorKind::Other, format!("Path is not a file: {:?}", p)).into(),
+                );
+            }
+        }
+
         // The key needs to be supplied first.
         let locked_key_provider = self.key_provider.lock().await;
         let key_provider = if let Some(key_provider) = &*locked_key_provider {