diff --git a/IAA/indy_agent.py b/IAA/indy_agent.py
index 4d72238..59ed409 100644
--- a/IAA/indy_agent.py
+++ b/IAA/indy_agent.py
@@ -1,4 +1,4 @@
-from indy import did,wallet,crypto
+from indy import did, wallet, crypto, IndyError
 import asyncio
 import base64
 import random
@@ -14,7 +14,10 @@ async def verify_did(client_did, challenge = None, signature=None, wallet_handle
             return 401, {'code':401, 'message' : 'Proof required','challenge': Indy.create_nonce()}
         if (client_did != None and challenge != None and signature != None and wallet_handle!= None):
             if (only_wallet_lookup):
-                verkey = await did.key_for_local_did(wallet_handle, client_did)
+                try:
+                    verkey = await did.key_for_local_did(wallet_handle, client_did)
+                except IndyError:
+                    return 404, {'code': 404, 'message': 'DID doesn\'t exist'}
             else:
                 verkey = ""
             #Add code to check if verkey exists
diff --git a/README.md b/README.md
index 8753932..e7c0410 100644
--- a/README.md
+++ b/README.md
@@ -1,102 +1,102 @@
-# Identity, Authentication, and Authorization Component
-## Description
-
-
-### Architecture Overview
-
-
-
-### Relation with SOFIE
-
-Nore information about this compoment and its relation to the SOFIE project can be found in [D2.5 Federation Framework, SOFIE deliverable](https://media.voog.com/0000/0042/0957/files/SOFIE_D2.5-Federation_Framework%2C_2nd_version.pdf)
-
-
-### Key Technologies
-
-
-
-## Usage
-
-
-## Installation
-
-### Prerequisites
-Python 3, Hyperledger Indy SDK and the python wrapper, PyJWT are required. Use the following commands to install the prerequisites in Ubuntu 18.04 
-
-* sudo apt-key adv --keyserver keyserver.ubuntu.com --recv-keys CE7709D068DB5E88
-* sudo add-apt-repository "deb https://repo.sovrin.org/sdk/deb bionic stable"
-* sudo apt-get update
-* sudo apt-get install -y libindy
-* pip3 install python3-indy pyjwt web3 
-
-
-### Configuration
-A sample configuration file is provided at conf/sample.conf
-
-### Execution from source
-From the root directory run `python3 IAA/iaa.py <configuration file>` e.g., `python3 IAA/iaa.py conf/iaa.conf`
-
-### Dockerized version
-In order to build IAA image, execute the script `docker-build.sh`. Then you can run IAA using, for example,  `docker run -tid --rm -p 9000:9000 iaa`. You can verfiry that IAA is running properly be executing the script `examples/validate_token.sh`
-
-### Usage
-The executed script creates an HTTP server that listens for REST API calls at port 9000. The REST API of IAA component is documented in 
-
-https://app.swaggerhub.com/apis-docs/nikosft/SOFIE-PDS-IAA/1.0.0#/IAA/vertoken 
-
-Please select **schema** to see all available API parameters and their documentation.
-
-#### Examples
-Verifying a DID (see also tests/test_api.py)
-```python
-user = {
-        'wallet_config': json.dumps({'id': 'user_wallet',"storage_config":{"path":"tests/indy_wallets"}}),
-        'wallet_credentials': json.dumps({'key': 'user_wallet_key'}),
-        'did' : '4qk3Ab43ufPQVif4GAzLUW'
-    }
-payload = {'token-type':'DID', 'token':user['did']}
-response  = requests.post("http://localhost:9000/verifytoken", data = payload).text
-response =json.loads(response)
-assert(response['code'] == 401)
-challenge = response['challenge']
-wallet_handle = await wallet.open_wallet(user['wallet_config'], user['wallet_credentials'])
-verkey = await did.key_for_local_did(wallet_handle, user['did'])
-signature = await crypto.crypto_sign(wallet_handle, verkey, challenge.encode())
-signature64 = base64.b64encode(signature)
-payload = {'token-type':'DID', 'token':user['did'], 'challenge': challenge, 'proof':signature64}
-response  = requests.post("http://localhost:9000/verifytoken", data = payload).text
-response =json.loads(response)
-assert(response['code'] == 200)
-await wallet.close_wallet(wallet_handle)
-```
-
-## Testing
-
-### Prerequisites
-
-Tests are executed using pytest and pytest-asyncio. To install it execute 
-
-* pip3 install -U pytest 
-* pip3 install pytest-asyncio
-
-### Running the tests
-From the root directory run `python3 -m pytest -s  tests/`
-
-
-## Integration
-
-To be provided.
-
-## Deployment
-
-To be provided.
-
-## Known/Open Issues
-
-No known issues
-
-## Contact info
-
-Please contact Nikos Fotiou or Dimitris Dimopoulos (AUEB) in case of any questions.
-
+# Identity, Authentication, and Authorization Component
+## Description
+
+
+### Architecture Overview
+
+
+
+### Relation with SOFIE
+
+Nore information about this component and its relation to the SOFIE project can be found in [D2.5 Federation Framework, SOFIE deliverable](https://media.voog.com/0000/0042/0957/files/SOFIE_D2.5-Federation_Framework%2C_2nd_version.pdf)
+
+
+### Key Technologies
+
+
+
+## Usage
+
+
+## Installation
+
+### Prerequisites
+Python 3, Hyperledger Indy SDK and the python wrapper, PyJWT are required. Use the following commands to install the prerequisites in Ubuntu 18.04 
+
+* sudo apt-key adv --keyserver keyserver.ubuntu.com --recv-keys CE7709D068DB5E88
+* sudo add-apt-repository "deb https://repo.sovrin.org/sdk/deb bionic stable"
+* sudo apt-get update
+* sudo apt-get install -y libindy
+* pip3 install python3-indy pyjwt web3 
+
+
+### Configuration
+A sample configuration file is provided at conf/sample.conf
+
+### Execution from source
+From the root directory run `python3 IAA/iaa.py <configuration file>` e.g., `python3 IAA/iaa.py conf/iaa.conf`
+
+### Dockerized version
+In order to build IAA image, execute the script `docker-build.sh`. Then you can run IAA using, for example,  `docker run -tid --rm -p 9000:9000 iaa`. You can verfiry that IAA is running properly be executing the script `examples/validate_token.sh`
+
+### Usage
+The executed script creates an HTTP server that listens for REST API calls at port 9000. The REST API of IAA component is documented in 
+
+https://app.swaggerhub.com/apis-docs/nikosft/SOFIE-PDS-IAA/1.0.0#/IAA/vertoken 
+
+Please select **schema** to see all available API parameters and their documentation.
+
+#### Examples
+Verifying a DID (see also tests/test_api.py)
+```python
+user = {
+        'wallet_config': json.dumps({'id': 'user_wallet',"storage_config":{"path":"tests/indy_wallets"}}),
+        'wallet_credentials': json.dumps({'key': 'user_wallet_key'}),
+        'did' : '4qk3Ab43ufPQVif4GAzLUW'
+    }
+payload = {'token-type':'DID', 'token':user['did']}
+response  = requests.post("http://localhost:9000/verifytoken", data = payload).text
+response =json.loads(response)
+assert(response['code'] == 401)
+challenge = response['challenge']
+wallet_handle = await wallet.open_wallet(user['wallet_config'], user['wallet_credentials'])
+verkey = await did.key_for_local_did(wallet_handle, user['did'])
+signature = await crypto.crypto_sign(wallet_handle, verkey, challenge.encode())
+signature64 = base64.b64encode(signature)
+payload = {'token-type':'DID', 'token':user['did'], 'challenge': challenge, 'proof':signature64}
+response  = requests.post("http://localhost:9000/verifytoken", data = payload).text
+response =json.loads(response)
+assert(response['code'] == 200)
+await wallet.close_wallet(wallet_handle)
+```
+
+## Testing
+
+### Prerequisites
+
+Tests are executed using pytest and pytest-asyncio. To install it execute 
+
+* pip3 install -U pytest 
+* pip3 install pytest-asyncio
+
+### Running the tests
+From the root directory run `python3 -m pytest -s  tests/`
+
+
+## Integration
+
+To be provided.
+
+## Deployment
+
+To be provided.
+
+## Known/Open Issues
+
+No known issues
+
+## Contact info
+
+Please contact Nikos Fotiou or Dimitris Dimopoulos (AUEB) in case of any questions.
+
 ***
\ No newline at end of file
diff --git a/tests/test_indy_agent.py b/tests/test_indy_agent.py
index 7006be2..50b0059 100644
--- a/tests/test_indy_agent.py
+++ b/tests/test_indy_agent.py
@@ -39,4 +39,13 @@ async def test_valid_did():
     code, response = await Indy.verify_did(user['did'], challenge, signature64,server_wallet_handle,"", True)
     assert (code == 200)
     await wallet.close_wallet(wallet_handle)
-    await wallet.close_wallet(server_wallet_handle)
\ No newline at end of file
+    await wallet.close_wallet(server_wallet_handle)
+
+
+@pytest.mark.asyncio
+async def test_invalid_did():
+    code, response = await Indy.verify_did(user['did'], challenge='dummy')
+    assert (code == 403)
+    not_exist_did = '3qk3Ab43ufPQVif4GAzLUW'
+    code, response = await Indy.verify_did(not_exist_did, '1', 'xyz', 5, "",True)
+    assert (code == 404)
\ No newline at end of file