diff --git a/mev_inspect/transfers.py b/mev_inspect/transfers.py
index 924a8d2..991e3fe 100644
--- a/mev_inspect/transfers.py
+++ b/mev_inspect/transfers.py
@@ -1,4 +1,4 @@
-from typing import List, Optional
+from typing import Dict, List, Optional
 
 from mev_inspect.schemas.classified_traces import Classification, ClassifiedTrace
 from mev_inspect.schemas.transfers import Transfer
@@ -40,17 +40,23 @@ def filter_transfers(
 
 def remove_inner_transfers(transfers: List[Transfer]) -> List[Transfer]:
     updated_transfers = []
-    transfer_trace_addresses: List[List[int]] = []
+    transfer_addresses_by_transaction: Dict[str, List[List[int]]] = {}
 
     sorted_transfers = sorted(transfers, key=lambda t: t.trace_address)
 
     for transfer in sorted_transfers:
+        existing_addresses = transfer_addresses_by_transaction.get(
+            transfer.transaction_hash, []
+        )
+
         if not any(
             is_child_trace_address(transfer.trace_address, parent_address)
-            for parent_address in transfer_trace_addresses
+            for parent_address in existing_addresses
         ):
             updated_transfers.append(transfer)
 
-        transfer_trace_addresses.append(transfer.trace_address)
+        transfer_addresses_by_transaction[
+            transfer.transaction_hash
+        ] = existing_addresses + [transfer.trace_address]
 
     return updated_transfers
diff --git a/tests/conftest.py b/tests/conftest.py
new file mode 100644
index 0000000..9391342
--- /dev/null
+++ b/tests/conftest.py
@@ -0,0 +1,26 @@
+from hashlib import sha3_256
+from typing import List
+
+import pytest
+
+
+@pytest.fixture(name="get_transaction_hashes")
+def fixture_get_transaction_hashes():
+    def _get_transaction_hashes(n: int):
+        return _hash_with_prefix(n, "transaction_hash")
+
+    return _get_transaction_hashes
+
+
+@pytest.fixture(name="get_addresses")
+def fixture_get_addresses():
+    def _get_addresses(n: int):
+        return [f"0x{hash_value[:40]}" for hash_value in _hash_with_prefix(n, "addr")]
+
+    return _get_addresses
+
+
+def _hash_with_prefix(n_hashes: int, prefix: str) -> List[str]:
+    return [
+        sha3_256(f"{prefix}{i}".encode("utf-8")).hexdigest() for i in range(n_hashes)
+    ]
diff --git a/tests/test_traces.py b/tests/test_traces.py
index a11a253..489d677 100644
--- a/tests/test_traces.py
+++ b/tests/test_traces.py
@@ -1,21 +1,10 @@
-from hashlib import sha3_256
 from typing import List
 
-import pytest
-
 from mev_inspect.schemas.blocks import TraceType
 from mev_inspect.schemas.classified_traces import Classification, ClassifiedTrace
 from mev_inspect.traces import is_child_trace_address, get_child_traces
 
 
-@pytest.fixture(name="get_transaction_hashes")
-def fixture_get_transaction_hashes():
-    def _get_transaction_hashes(n: int):
-        return [sha3_256(str(i).encode("utf-8")).hexdigest() for i in range(n)]
-
-    return _get_transaction_hashes
-
-
 def make_unknown_classified_trace(
     block_number,
     transaction_hash,
diff --git a/tests/test_transfers.py b/tests/test_transfers.py
new file mode 100644
index 0000000..d65a753
--- /dev/null
+++ b/tests/test_transfers.py
@@ -0,0 +1,71 @@
+from mev_inspect.schemas.transfers import Transfer
+from mev_inspect.transfers import remove_inner_transfers
+
+
+def test_remove_inner_transfers(get_transaction_hashes, get_addresses):
+    [transaction_hash, other_transaction_hash] = get_transaction_hashes(2)
+
+    [
+        alice_address,
+        bob_address,
+        first_token_address,
+        second_token_address,
+        third_token_address,
+    ] = get_addresses(5)
+
+    outer_transfer = Transfer(
+        transaction_hash=transaction_hash,
+        trace_address=[0],
+        from_address=alice_address,
+        to_address=bob_address,
+        amount=10,
+        token_address=first_token_address,
+    )
+
+    inner_transfer = Transfer(
+        **{
+            **outer_transfer.dict(),
+            **dict(
+                trace_address=[0, 0],
+                token_address=second_token_address,
+            ),
+        }
+    )
+
+    other_transfer = Transfer(
+        transaction_hash=transaction_hash,
+        trace_address=[1],
+        from_address=bob_address,
+        to_address=alice_address,
+        amount=10,
+        token_address=third_token_address,
+    )
+
+    separate_transaction_transfer = Transfer(
+        **{
+            **inner_transfer.dict(),
+            **dict(transaction_hash=other_transaction_hash),
+        }
+    )
+
+    transfers = [
+        outer_transfer,
+        inner_transfer,
+        other_transfer,
+        separate_transaction_transfer,
+    ]
+
+    expected_transfers = [
+        outer_transfer,
+        other_transfer,
+        separate_transaction_transfer,
+    ]
+
+    removed_transfers = remove_inner_transfers(transfers)
+    assert _equal_ignoring_order(removed_transfers, expected_transfers)
+
+
+def _equal_ignoring_order(first_list, second_list) -> bool:
+    return all(first in second_list for first in first_list) and all(
+        second in first_list for second in second_list
+    )