diff --git a/docker/dev.sh b/docker/dev.sh
index e1d55b2..14e5571 100755
--- a/docker/dev.sh
+++ b/docker/dev.sh
@@ -86,18 +86,165 @@ is_lnd4_ready() {
     docker exec lnbits-lnd-4-1 lncli --network=regtest --rpcserver=lnd-4:10009 getinfo &>/dev/null 2>&1
 }
 
+lnd4_has_channels() {
+    local channel_count=$(docker exec lnbits-lnd-4-1 lncli --network=regtest --rpcserver=lnd-4:10009 listchannels 2>/dev/null | grep -c '"chan_id"' || echo "0")
+    [[ "$channel_count" -gt 0 ]]
+}
+
+lnd4_has_active_channels() {
+    docker exec lnbits-lnd-4-1 lncli --network=regtest --rpcserver=lnd-4:10009 listchannels 2>/dev/null | grep -q '"active": true'
+}
+
 is_lightning_pub_ready() {
     docker logs lamassu-lightning-pub 2>&1 | grep -q "LightningPub listening"
 }
 
 get_lnd4_balance() {
-    docker exec lnbits-lnd-4-1 lncli --network=regtest walletbalance 2>/dev/null | grep -oP '"total_balance":\s*"\K[0-9]+' || echo "0"
+    docker exec lnbits-lnd-4-1 lncli --network=regtest --rpcserver=lnd-4:10009 walletbalance 2>/dev/null | grep -oP '"total_balance":\s*"\K[0-9]+' || echo "0"
+}
+
+get_lnd4_channel_balance() {
+    docker exec lnbits-lnd-4-1 lncli --network=regtest --rpcserver=lnd-4:10009 channelbalance 2>/dev/null | grep -oP '"local_balance"[^}]*"sat":\s*"\K[0-9]+' || echo "0"
 }
 
 #############################################################################
 # Regtest Management
 #############################################################################
 
+is_lnd1_ready() {
+    # Check if lnd-1 is fully ready (can make RPC calls)
+    docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 getinfo &>/dev/null 2>&1
+}
+
+wait_for_lnd1() {
+    log "Waiting for lnd-1 to be ready..."
+    local attempts=0
+    while ! is_lnd1_ready && [[ $attempts -lt 30 ]]; do
+        sleep 2
+        attempts=$((attempts + 1))
+    done
+    is_lnd1_ready
+}
+
+ensure_lnd4_channel() {
+    # Ensure lnd-4 has a channel so it can create invoices
+    # Also ensure lnd-3 has a channel so it can pay invoices (for funding)
+    # Opens channels from lnd-1 (hub) to both lnd-3 and lnd-4
+
+    if lnd4_has_active_channels; then
+        log "lnd-4 has active channels"
+        return 0
+    fi
+
+    log "Setting up Lightning channels for ATM..."
+
+    # Wait for lnd-1 to be ready (it's the funding hub)
+    if ! wait_for_lnd1; then
+        error "lnd-1 failed to start"
+        return 1
+    fi
+    success "lnd-1 is ready"
+
+    # Give lnd-1 a moment to fully initialize (getinfo succeeds before all subsystems ready)
+    sleep 5
+
+    # Check if lnd-1 has funds, if not fund it
+    local lnd1_balance=$(docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 walletbalance 2>/dev/null | grep -oP '"confirmed_balance":\s*"\K[0-9]+' | head -1 || echo "0")
+    lnd1_balance="${lnd1_balance:-0}"
+    if [[ "$lnd1_balance" -lt 100000000 ]]; then
+        log "Funding lnd-1 with mining rewards..."
+        local lnd1_addr=$(docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 newaddress p2wkh 2>/dev/null | grep -oP '"address":\s*"\K[^"]+')
+        docker exec lnbits-bitcoind-1 bitcoin-cli -regtest generatetoaddress 110 "$lnd1_addr" &>/dev/null
+        sleep 3
+        success "lnd-1 funded"
+    fi
+
+    # Get pubkeys
+    local lnd4_pubkey=$(docker exec lnbits-lnd-4-1 lncli --network=regtest --rpcserver=lnd-4:10009 getinfo 2>/dev/null | grep -oP '"identity_pubkey":\s*"\K[^"]+')
+    local lnd3_pubkey=$(docker exec lnbits-lnd-3-1 lncli --network=regtest --rpcserver=lnd-3:10009 getinfo 2>/dev/null | grep -oP '"identity_pubkey":\s*"\K[^"]+')
+
+    if [[ -z "$lnd4_pubkey" ]] || [[ -z "$lnd3_pubkey" ]]; then
+        error "Could not get LND pubkeys"
+        return 1
+    fi
+
+    # Connect lnd-1 to lnd-3 and lnd-4
+    log "Connecting nodes..."
+    docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 \
+        connect "${lnd3_pubkey}@lnd-3:9735" &>/dev/null || true
+    docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 \
+        connect "${lnd4_pubkey}@lnd-4:9735" &>/dev/null || true
+
+    # Retry loop for opening channels (server may still be initializing)
+    local result3="" result4="" attempts=0
+    while [[ $attempts -lt 5 ]]; do
+        # Open channel to lnd-3: 10M sats, push 5M so lnd-3 has sending capacity
+        if [[ -z "$result3" ]] || echo "$result3" | grep -q "still in the process of starting"; then
+            result3=$(docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 \
+                openchannel --node_key="$lnd3_pubkey" --local_amt=10000000 --push_amt=5000000 2>&1)
+        fi
+
+        # Open channel to lnd-4: 10M sats, push 5M so lnd-4 has receiving capacity
+        if [[ -z "$result4" ]] || echo "$result4" | grep -q "still in the process of starting"; then
+            result4=$(docker exec lnbits-lnd-1-1 lncli --network=regtest --rpcserver=lnd-1:10009 \
+                openchannel --node_key="$lnd4_pubkey" --local_amt=10000000 --push_amt=5000000 2>&1)
+        fi
+
+        # Check if both succeeded
+        if echo "$result3" | grep -q "funding_txid" && echo "$result4" | grep -q "funding_txid"; then
+            break
+        fi
+
+        attempts=$((attempts + 1))
+        if [[ $attempts -lt 5 ]]; then
+            log "Waiting for LND to be fully ready... (attempt $attempts/5)"
+            sleep 5
+        fi
+    done
+
+    log "Opening channel lnd-1 -> lnd-3..."
+    log "Opening channel lnd-1 -> lnd-4..."
+
+    local channels_opened=false
+    if echo "$result3" | grep -q "funding_txid" || echo "$result4" | grep -q "funding_txid"; then
+        channels_opened=true
+    fi
+
+    if [[ "$channels_opened" == "true" ]]; then
+        log "Mining blocks to confirm channels..."
+
+        # Mine 10 blocks to confirm channels and allow graph propagation
+        local addr=$(docker exec lnbits-bitcoind-1 bitcoin-cli -regtest getnewaddress 2>/dev/null)
+        docker exec lnbits-bitcoind-1 bitcoin-cli -regtest generatetoaddress 10 "$addr" &>/dev/null
+
+        # Wait for channels to become active
+        local attempts=0
+        while ! lnd4_has_active_channels && [[ $attempts -lt 20 ]]; do
+            sleep 2
+            attempts=$((attempts + 1))
+        done
+
+        if lnd4_has_active_channels; then
+            # Wait a bit more for graph propagation
+            log "Waiting for network graph to sync..."
+            sleep 10
+            # Mine a few more blocks to trigger announcements
+            docker exec lnbits-bitcoind-1 bitcoin-cli -regtest generatetoaddress 6 "$addr" &>/dev/null
+            sleep 5
+            success "Channels active - lnd-3 and lnd-4 ready"
+            return 0
+        else
+            warn "Channels opened but not yet active, may need more time"
+            return 0
+        fi
+    else
+        error "Failed to open channels"
+        echo "lnd-3 result: $result3"
+        echo "lnd-4 result: $result4"
+        return 1
+    fi
+}
+
 start_regtest() {
     if is_regtest_running; then
         log "Regtest network already running"
@@ -128,6 +275,9 @@ start_regtest() {
         error "lnd-4 failed to start"
         return 1
     fi
+
+    # Ensure lnd-4 has a channel for invoices
+    ensure_lnd4_channel || warn "Could not setup lnd-4 channel (funding may fail)"
 }
 
 stop_regtest() {
@@ -336,8 +486,10 @@ show_status() {
     echo "  Withdraw API:     http://${local_ip}:1777"
     echo ""
 
+    local lnd4_channel_balance=$(get_lnd4_channel_balance)
     echo -e "${CYAN}lnd-4 (Lightning.Pub backend)${NC}"
-    echo "  Balance:          ${lnd4_balance} sats"
+    echo "  Channel Balance:  ${lnd4_channel_balance} sats"
+    echo "  Wallet Balance:   ${lnd4_balance} sats"
     echo ""
 
     echo -e "${CYAN}ATM App${NC}"
@@ -413,6 +565,9 @@ cmd_up() {
         echo "  Start with: regtest-start"
         echo "  Or use:     ./dev.sh up --standalone"
         exit 1
+    elif [[ "$standalone" != "true" ]]; then
+        # Regtest already running, but ensure lnd-4 has channels
+        ensure_lnd4_channel || warn "Could not setup lnd-4 channel (funding may fail)"
     fi
 
     # 2. Build from worktree if specified