diff --git a/crates/aiken-lang/src/expr.rs b/crates/aiken-lang/src/expr.rs
index 0ae888d0..5062319d 100644
--- a/crates/aiken-lang/src/expr.rs
+++ b/crates/aiken-lang/src/expr.rs
@@ -1300,7 +1300,7 @@ impl UntypedExpr {
     }
 
     pub fn lambda(
-        names: Vec<(String, Span, Option<Annotation>)>,
+        names: Vec<(ArgName, Span, Option<Annotation>)>,
         expressions: Vec<UntypedExpr>,
         location: Span,
     ) -> Self {
@@ -1309,17 +1309,12 @@ impl UntypedExpr {
             fn_style: FnStyle::Plain,
             arguments: names
                 .into_iter()
-                .map(|(name, location, annotation)| Arg {
+                .map(|(arg_name, location, annotation)| Arg {
                     location,
                     doc: None,
                     annotation,
                     tipo: (),
-                    arg_name: ArgName::Named {
-                        label: name.clone(),
-                        name,
-                        location,
-                        is_validator_param: false,
-                    },
+                    arg_name,
                 })
                 .collect(),
             body: Self::Sequence {
diff --git a/crates/aiken-lang/src/tests/check.rs b/crates/aiken-lang/src/tests/check.rs
index 23501e35..431515d3 100644
--- a/crates/aiken-lang/src/tests/check.rs
+++ b/crates/aiken-lang/src/tests/check.rs
@@ -2008,3 +2008,25 @@ fn correct_span_for_backpassing_args() {
         matches!(&warnings[0], Warning::UnusedVariable { ref name, location } if name == "b" && location.start == 245 && location.end == 246)
     );
 }
+
+#[test]
+fn allow_discard_for_backpassing_args() {
+    let source_code = r#"
+        fn fold(list: List<a>, acc: b, f: fn(a, b) -> b) -> b {
+          when list is {
+            [] -> acc
+            [x, ..xs] -> fold(xs, f(x, acc), f)
+          }
+        }
+
+        pub fn sum(list: List<Int>) -> Int {
+          let a, _b <- fold(list, 0)
+
+          a + 1
+        }
+    "#;
+
+    let (warnings, _ast) = check(parse(source_code)).unwrap();
+
+    assert_eq!(warnings.len(), 0);
+}
diff --git a/crates/aiken-lang/src/tipo/expr.rs b/crates/aiken-lang/src/tipo/expr.rs
index 6ed64c7e..8875506a 100644
--- a/crates/aiken-lang/src/tipo/expr.rs
+++ b/crates/aiken-lang/src/tipo/expr.rs
@@ -1768,14 +1768,41 @@ impl<'a, 'b> ExprTyper<'a, 'b> {
             // in front of the continuation sequence. This is because we do not support patterns in function argument
             // (which is perhaps something we should support?).
             match pattern {
-                Pattern::Var { name, location: _ } | Pattern::Discard { name, location: _ }
-                    if kind.is_let() =>
-                {
-                    names.push((name.clone(), assignment_pattern_location, annotation));
+                Pattern::Var {
+                    name,
+                    location: var_location,
+                } if kind.is_let() => {
+                    let name = ArgName::Named {
+                        label: name.clone(),
+                        name,
+                        location: var_location,
+                        is_validator_param: false,
+                    };
+
+                    names.push((name, assignment_pattern_location, annotation));
+                }
+                Pattern::Discard {
+                    name,
+                    location: var_location,
+                } if kind.is_let() => {
+                    let name = ArgName::Discarded {
+                        label: name.clone(),
+                        name,
+                        location: var_location,
+                    };
+
+                    names.push((name, assignment_pattern_location, annotation));
                 }
                 _ => {
                     let name = format!("{}_{}", ast::BACKPASS_VARIABLE, index);
 
+                    let arg_name = ArgName::Named {
+                        label: name.clone(),
+                        name: name.clone(),
+                        location: pattern.location(),
+                        is_validator_param: false,
+                    };
+
                     continuation.insert(
                         0,
                         UntypedExpr::Assignment {
@@ -1799,7 +1826,7 @@ impl<'a, 'b> ExprTyper<'a, 'b> {
                         },
                     );
 
-                    names.push((name, assignment_pattern_location, annotation));
+                    names.push((arg_name, assignment_pattern_location, annotation));
                 }
             }
         }