diff --git a/liquidity/autoloop_test.go b/liquidity/autoloop_test.go
index 561a0e187..76a477242 100644
--- a/liquidity/autoloop_test.go
+++ b/liquidity/autoloop_test.go
@@ -1287,9 +1287,20 @@ func TestEasyAutoloop(t *testing.T) {
 		Capacity:      100000,
 	}
 
+	// The custom channel should be ignored.
+	easyChannelCustom := lndclient.ChannelInfo{
+		Active:            true,
+		ChannelID:         chanID1.ToUint64(),
+		PubKeyBytes:       peer1,
+		LocalBalance:      50000,
+		RemoteBalance:     0,
+		Capacity:          100000,
+		CustomChannelData: []byte("foo"),
+	}
+
 	var (
 		channels = []lndclient.ChannelInfo{
-			easyChannel1, easyChannel2,
+			easyChannel1, easyChannel2, easyChannelCustom,
 		}
 
 		params = Parameters{
@@ -1361,7 +1372,7 @@ func TestEasyAutoloop(t *testing.T) {
 	// new context and restart the autolooper.
 	easyChannel1.LocalBalance -= chan1Swap.Amount
 	channels = []lndclient.ChannelInfo{
-		easyChannel1, easyChannel2,
+		easyChannel1, easyChannel2, easyChannelCustom,
 	}
 
 	// Remove the custom dest address.
@@ -1419,7 +1430,7 @@ func TestEasyAutoloop(t *testing.T) {
 	// new context and restart the autolooper.
 	easyChannel2.LocalBalance -= btcutil.Amount(amt2)
 	channels = []lndclient.ChannelInfo{
-		easyChannel1, easyChannel2,
+		easyChannel1, easyChannel2, easyChannelCustom,
 	}
 
 	c = newAutoloopTestCtx(t, params, channels, testRestrictions)
@@ -1438,7 +1449,7 @@ func TestEasyAutoloop(t *testing.T) {
 	// Restore the local balance to a higher value that will trigger a swap.
 	easyChannel2.LocalBalance = btcutil.Amount(95000)
 	channels = []lndclient.ChannelInfo{
-		easyChannel1, easyChannel2,
+		easyChannel1, easyChannel2, easyChannelCustom,
 	}
 
 	// Override the feeppm with a lower one.
diff --git a/liquidity/liquidity.go b/liquidity/liquidity.go
index fbd842b1f..b8cbf5771 100644
--- a/liquidity/liquidity.go
+++ b/liquidity/liquidity.go
@@ -556,6 +556,9 @@ func (m *Manager) dispatchBestEasyAutoloopSwap(ctx context.Context) error {
 
 	localTotal := btcutil.Amount(0)
 	for _, channel := range channels {
+		if channelIsCustom(channel) {
+			continue
+		}
 		localTotal += channel.LocalBalance
 	}
 
@@ -781,6 +784,10 @@ func (m *Manager) SuggestSwaps(ctx context.Context) (
 	channelPeers := make(map[uint64]route.Vertex)
 	peerChannels := make(map[route.Vertex]*balances)
 	for _, channel := range channels {
+		if channelIsCustom(channel) {
+			continue
+		}
+
 		channelPeers[channel.ChannelID] = channel.PubKeyBytes
 
 		bal, ok := peerChannels[channel.PubKeyBytes]
@@ -834,6 +841,14 @@ func (m *Manager) SuggestSwaps(ctx context.Context) (
 		balance := newBalances(channel)
 
 		channelID := lnwire.NewShortChanIDFromInt(channel.ChannelID)
+
+		if channelIsCustom(channel) {
+			resp.DisqualifiedChans[channelID] =
+				ReasonCustomChannelData
+
+			continue
+		}
+
 		rule, ok := m.params.ChannelRules[channelID]
 		if !ok {
 			continue
@@ -1424,6 +1439,10 @@ func (m *Manager) pickEasyAutoloopChannel(channels []lndclient.ChannelInfo,
 	// Check each channel, since channels are already sorted we return the
 	// first channel that passes all checks.
 	for _, channel := range channels {
+		if channelIsCustom(channel) {
+			continue
+		}
+
 		shortChanID := lnwire.NewShortChanIDFromInt(channel.ChannelID)
 
 		if !channel.Active {
@@ -1548,3 +1567,12 @@ func satPerKwToSatPerVByte(satPerKw chainfee.SatPerKWeight) int64 {
 func ppmToSat(amount btcutil.Amount, ppm uint64) btcutil.Amount {
 	return btcutil.Amount(uint64(amount) * ppm / FeeBase)
 }
+
+// channelIsCustom returns true if the channel has custom channel data.
+// we'll want to ignore these channels for autoloop recommendations.
+func channelIsCustom(channel lndclient.ChannelInfo) bool {
+	// If the channel has custom channel data, the channel is a
+	// non-standard channel, such as an asset channel and we
+	// don't want to consider it for swaps.
+	return channel.CustomChannelData != nil
+}
diff --git a/liquidity/liquidity_test.go b/liquidity/liquidity_test.go
index f3fae1e65..b45c3dc1b 100644
--- a/liquidity/liquidity_test.go
+++ b/liquidity/liquidity_test.go
@@ -794,6 +794,29 @@ func TestSuggestSwaps(t *testing.T) {
 				},
 			},
 		},
+		{
+
+			name: "don't consider asset channel",
+			channels: []lndclient.ChannelInfo{
+				{
+					ChannelID:         chanID1.ToUint64(),
+					PubKeyBytes:       peer1,
+					LocalBalance:      10000,
+					RemoteBalance:     0,
+					Capacity:          10000,
+					CustomChannelData: []byte("foo"),
+				},
+			},
+			rules: map[lnwire.ShortChannelID]*SwapRule{
+				chanID1: chanRule,
+			},
+			suggestions: &Suggestions{
+				DisqualifiedChans: map[lnwire.ShortChannelID]Reason{ // nolint: lll
+					chanID1: ReasonCustomChannelData,
+				},
+				DisqualifiedPeers: noPeersDisqualified,
+			},
+		},
 	}
 
 	for _, testCase := range tests {
diff --git a/liquidity/reasons.go b/liquidity/reasons.go
index aee4a4c16..a73f9000a 100644
--- a/liquidity/reasons.go
+++ b/liquidity/reasons.go
@@ -69,6 +69,10 @@ const (
 	// ReasonLoopInUnreachable indicates that the server does not have a
 	// path to the client, so cannot perform a loop in swap at this time.
 	ReasonLoopInUnreachable
+
+	// ReasonCustomChannelData indicates that the channel is not standard
+	// and should not be used for swaps.
+	ReasonCustomChannelData
 )
 
 // String returns a string representation of a reason.