diff --git a/sdk/src/test/java/com/uid2/UID2ClientTest.kt b/sdk/src/test/java/com/uid2/UID2ClientTest.kt
index 4d24b56..93c55c8 100644
--- a/sdk/src/test/java/com/uid2/UID2ClientTest.kt
+++ b/sdk/src/test/java/com/uid2/UID2ClientTest.kt
@@ -220,6 +220,29 @@ class UID2ClientTest {
         assertEquals(expectedIdentity, response.identity)
     }
 
+    @Test
+    fun `test generate opt-out`() = runTest(testDispatcher) {
+        val client = withClient()
+
+        // Configure the network request to return a status which indicates the user has opted-out.
+        val unencrypted = JSONObject(TestData.REFRESH_TOKEN_OPT_OUT_DECRYPTED)
+        every { dataEnvelope.decrypt(any<ByteArray>(), any<String>(), any<Boolean>()) }.returns(
+            unencrypted.toString().toByteArray(),
+        )
+        every { networkSession.loadData(any(), any()) }.returns(NetworkResponse(200, "some data"))
+
+        val response = client.generateIdentity(
+            IdentityRequest.Email("test@test.com"),
+            SUBSCRIPTION_ID,
+            PUBLIC_KEY,
+        )
+        assertNotNull(response)
+
+        // Verify that we don't receive any identity but the status explicitly tells us that they have opted-out.
+        assertNull(response.identity)
+        assertEquals(IdentityStatus.OPT_OUT, response.status)
+    }
+
     //endregion
 
     //region refreshIdentity
diff --git a/sdk/src/test/java/com/uid2/UID2ManagerTest.kt b/sdk/src/test/java/com/uid2/UID2ManagerTest.kt
index 3a71b49..32baba1 100644
--- a/sdk/src/test/java/com/uid2/UID2ManagerTest.kt
+++ b/sdk/src/test/java/com/uid2/UID2ManagerTest.kt
@@ -197,6 +197,29 @@ class UID2ManagerTest {
         assertTrue(result is GenerateIdentityResult.Error)
     }
 
+    @Test
+    fun `generates for opt-out identity`() = runTest(testDispatcher) {
+        val subscriptionId = "sub"
+        val publicKey = "pub"
+
+        val request = IdentityRequest.Email("test@test.com")
+        coEvery { client.generateIdentity(request, subscriptionId, publicKey) }.returns(
+            ResponsePackage(null, OPT_OUT, ""),
+        )
+
+        // Request a new identity should be generated.
+        var result: GenerateIdentityResult? = null
+        manager.generateIdentity(request, subscriptionId, publicKey) { result = it }
+        testDispatcher.scheduler.advanceUntilIdle()
+
+        // Verify that after generating the identity, there is no current identity but the expected OPT_OUT status.
+        assertNull(manager.currentIdentity)
+        assertEquals(OPT_OUT, manager.currentIdentityStatus)
+
+        // Verify that the result callback was invoked.
+        assertTrue(result is GenerateIdentityResult.Success)
+    }
+
     @Test
     fun `resets identity`() = runTest(testDispatcher) {
         // Verify that the initial state of the manager reflects the restored Identity.