diff --git a/cli/executor_test.go b/cli/executor_test.go
index 6f39abb81..7274e1301 100644
--- a/cli/executor_test.go
+++ b/cli/executor_test.go
@@ -1,7 +1,6 @@
 package main
 
 import (
-	"bufio"
 	"bytes"
 	"errors"
 	"io"
@@ -27,7 +26,7 @@ import (
 	"github.com/urfave/cli"
 	"go.uber.org/zap"
 	"go.uber.org/zap/zaptest"
-	"golang.org/x/crypto/ssh/terminal"
+	"golang.org/x/term"
 )
 
 const (
@@ -100,9 +99,6 @@ func newExecutorWithConfig(t *testing.T, needChain bool, f func(*config.Config))
 	}
 	e.CLI.Writer = e.Out
 	e.CLI.ErrWriter = e.Err
-	rw := bufio.NewReadWriter(bufio.NewReader(e.In), bufio.NewWriter(ioutil.Discard))
-	require.Nil(t, input.Terminal) // check that tests clean up properly
-	input.Terminal = terminal.NewTerminal(rw, "")
 	if needChain {
 		e.Chain, e.RPC, e.NetSrv = newTestChain(t, f)
 	}
@@ -191,7 +187,12 @@ func (e *executor) Run(t *testing.T, args ...string) {
 func (e *executor) run(args ...string) error {
 	e.Out.Reset()
 	e.Err.Reset()
+	input.Terminal = term.NewTerminal(input.ReadWriter{
+		Reader: e.In,
+		Writer: ioutil.Discard,
+	}, "")
 	err := e.CLI.Run(args)
+	input.Terminal = nil
 	e.In.Reset()
 	return err
 }
diff --git a/cli/input/input.go b/cli/input/input.go
index 1a15f541e..fa61dee10 100644
--- a/cli/input/input.go
+++ b/cli/input/input.go
@@ -1,44 +1,57 @@
 package input
 
 import (
-	"bufio"
-	"fmt"
 	"io"
 	"os"
-	"strings"
 	"syscall"
 
-	"golang.org/x/crypto/ssh/terminal"
+	"golang.org/x/term"
 )
 
 // Terminal is a terminal used for input. If `nil`, stdin is used.
-var Terminal *terminal.Terminal
+var Terminal *term.Terminal
 
-// ReadLine reads line from the input without trailing '\n'
-func ReadLine(w io.Writer, prompt string) (string, error) {
-	if Terminal != nil {
-		_, err := Terminal.Write([]byte(prompt))
-		if err != nil {
-			return "", err
-		}
-		raw, err := Terminal.ReadLine()
-		return strings.TrimRight(raw, "\n"), err
-	}
-	fmt.Fprint(w, prompt)
-	buf := bufio.NewReader(os.Stdin)
-	return buf.ReadString('\n')
+// ReadWriter combiner reader and writer.
+type ReadWriter struct {
+	io.Reader
+	io.Writer
 }
 
-// ReadPassword reads user password with prompt.
-func ReadPassword(w io.Writer, prompt string) (string, error) {
-	if Terminal != nil {
-		return Terminal.ReadPassword(prompt)
+// ReadLine reads line from the input without trailing '\n'
+func ReadLine(prompt string) (string, error) {
+	trm := Terminal
+	if trm == nil {
+		s, err := term.MakeRaw(syscall.Stdin)
+		if err != nil {
+			panic(err)
+		}
+		defer term.Restore(syscall.Stdin, s)
+		trm = term.NewTerminal(ReadWriter{
+			Reader: os.Stdin,
+			Writer: os.Stdout,
+		}, "")
 	}
-	fmt.Fprint(w, prompt)
-	rawPass, err := terminal.ReadPassword(syscall.Stdin)
+	return readLine(trm, prompt)
+}
+
+func readLine(trm *term.Terminal, prompt string) (string, error) {
+	_, err := trm.Write([]byte(prompt))
 	if err != nil {
 		return "", err
 	}
-	fmt.Fprintln(w)
-	return strings.TrimRight(string(rawPass), "\n"), nil
+	return trm.ReadLine()
+}
+
+// ReadPassword reads user password with prompt.
+func ReadPassword(prompt string) (string, error) {
+	trm := Terminal
+	if trm == nil {
+		s, err := term.MakeRaw(syscall.Stdin)
+		if err != nil {
+			panic(err)
+		}
+		defer term.Restore(syscall.Stdin, s)
+		trm = term.NewTerminal(ReadWriter{os.Stdin, os.Stdout}, prompt)
+	}
+	return trm.ReadPassword(prompt)
 }
diff --git a/cli/smartcontract/smart_contract.go b/cli/smartcontract/smart_contract.go
index 790fb9ec1..f7ea2fed2 100644
--- a/cli/smartcontract/smart_contract.go
+++ b/cli/smartcontract/smart_contract.go
@@ -770,7 +770,7 @@ func getAccFromContext(ctx *cli.Context) (*wallet.Account, error) {
 		return nil, cli.NewExitError(fmt.Errorf("wallet contains no account for '%s'", address.Uint160ToString(addr)), 1)
 	}
 
-	rawPass, err := input.ReadPassword(ctx.App.Writer,
+	rawPass, err := input.ReadPassword(
 		fmt.Sprintf("Enter account %s password > ", address.Uint160ToString(addr)))
 	if err != nil {
 		return nil, cli.NewExitError(err, 1)
diff --git a/cli/vm/vm.go b/cli/vm/vm.go
index 5ea7c68a3..3bb725828 100644
--- a/cli/vm/vm.go
+++ b/cli/vm/vm.go
@@ -1,6 +1,9 @@
 package vm
 
 import (
+	"os"
+
+	"github.com/abiosoft/readline"
 	vmcli "github.com/nspcc-dev/neo-go/pkg/vm/cli"
 	"github.com/urfave/cli"
 )
@@ -18,6 +21,9 @@ func NewCommands() []cli.Command {
 }
 
 func startVMPrompt(ctx *cli.Context) error {
-	p := vmcli.New()
+	p := vmcli.NewWithConfig(true, os.Exit, &readline.Config{
+		Stdout: ctx.App.Writer,
+		Stderr: ctx.App.ErrWriter,
+	})
 	return p.Run()
 }
diff --git a/cli/wallet/validator.go b/cli/wallet/validator.go
index 50b09d38f..40e4e351f 100644
--- a/cli/wallet/validator.go
+++ b/cli/wallet/validator.go
@@ -197,7 +197,7 @@ func getDecryptedAccount(ctx *cli.Context, wall *wallet.Wallet, addr util.Uint16
 		return nil, fmt.Errorf("can't find account for the address: %s", address.Uint160ToString(addr))
 	}
 
-	if pass, err := input.ReadPassword(ctx.App.Writer, "Password > "); err != nil {
+	if pass, err := input.ReadPassword("Password > "); err != nil {
 		fmt.Println("ERROR", pass, err)
 		return nil, err
 	} else if err := acc.Decrypt(pass); err != nil {
diff --git a/cli/wallet/wallet.go b/cli/wallet/wallet.go
index 915321559..204b050da 100644
--- a/cli/wallet/wallet.go
+++ b/cli/wallet/wallet.go
@@ -261,7 +261,7 @@ func convertWallet(ctx *cli.Context) error {
 	defer newWallet.Close()
 
 	for _, acc := range wall.Accounts {
-		pass, err := input.ReadPassword(ctx.App.Writer, fmt.Sprintf("Enter passphrase for account %s (label '%s') > ", acc.Address, acc.Label))
+		pass, err := input.ReadPassword(fmt.Sprintf("Enter passphrase for account %s (label '%s') > ", acc.Address, acc.Label))
 		if err != nil {
 			return cli.NewExitError(err, 1)
 		}
@@ -331,7 +331,7 @@ loop:
 
 	for _, wif := range wifs {
 		if decrypt {
-			pass, err := input.ReadPassword(ctx.App.Writer, "Enter password > ")
+			pass, err := input.ReadPassword("Enter password > ")
 			if err != nil {
 				return cli.NewExitError(err, 1)
 			}
@@ -505,7 +505,7 @@ func removeAccount(ctx *cli.Context) error {
 }
 
 func askForConsent(w io.Writer) bool {
-	response, err := input.ReadLine(w, "Are you sure? [y/N]: ")
+	response, err := input.ReadLine("Are you sure? [y/N]: ")
 	if err == nil {
 		response = strings.ToLower(strings.TrimSpace(response))
 		if response == "y" || response == "yes" {
@@ -522,7 +522,7 @@ func dumpWallet(ctx *cli.Context) error {
 		return cli.NewExitError(err, 1)
 	}
 	if ctx.Bool("decrypt") {
-		pass, err := input.ReadPassword(ctx.App.Writer, "Enter wallet password > ")
+		pass, err := input.ReadPassword("Enter wallet password > ")
 		if err != nil {
 			return cli.NewExitError(err, 1)
 		}
@@ -563,12 +563,12 @@ func createWallet(ctx *cli.Context) error {
 }
 
 func readAccountInfo(w io.Writer) (string, string, error) {
-	rawName, _ := input.ReadLine(w, "Enter the name of the account > ")
-	phrase, err := input.ReadPassword(w, "Enter passphrase > ")
+	rawName, _ := input.ReadLine("Enter the name of the account > ")
+	phrase, err := input.ReadPassword("Enter passphrase > ")
 	if err != nil {
 		return "", "", err
 	}
-	phraseCheck, err := input.ReadPassword(w, "Confirm passphrase > ")
+	phraseCheck, err := input.ReadPassword("Confirm passphrase > ")
 	if err != nil {
 		return "", "", err
 	}
@@ -600,7 +600,7 @@ func newAccountFromWIF(w io.Writer, wif string) (*wallet.Account, error) {
 	// note: NEP2 strings always have length of 58 even though
 	// base58 strings can have different lengths even if slice lengths are equal
 	if len(wif) == 58 {
-		pass, err := input.ReadPassword(w, "Enter password > ")
+		pass, err := input.ReadPassword("Enter password > ")
 		if err != nil {
 			return nil, err
 		}
diff --git a/cli/wallet_test.go b/cli/wallet_test.go
index 6fbb2a9cc..923c5950e 100644
--- a/cli/wallet_test.go
+++ b/cli/wallet_test.go
@@ -9,6 +9,7 @@ import (
 	"strings"
 	"testing"
 
+	"github.com/abiosoft/readline"
 	"github.com/nspcc-dev/neo-go/pkg/crypto/hash"
 	"github.com/nspcc-dev/neo-go/pkg/crypto/keys"
 	"github.com/nspcc-dev/neo-go/pkg/encoding/address"
@@ -19,13 +20,37 @@ import (
 )
 
 func TestWalletInit(t *testing.T) {
-	tmpDir := os.TempDir()
+	tmpDir := path.Join(os.TempDir(), "neogo.test.walletinit")
+	require.NoError(t, os.Mkdir(tmpDir, os.ModePerm))
+	defer os.RemoveAll(tmpDir)
+
 	e := newExecutor(t, false)
 	defer e.Close(t)
 
 	walletPath := path.Join(tmpDir, "wallet.json")
 	e.Run(t, "neo-go", "wallet", "init", "--wallet", walletPath)
-	defer os.Remove(walletPath)
+
+	t.Run("terminal escape codes", func(t *testing.T) {
+		walletPath := path.Join(tmpDir, "walletrussian.json")
+		bksp := string([]byte{
+			byte(readline.CharBackward),
+			byte(readline.CharDelete),
+		})
+		e.In.WriteString("буквыы" +
+			bksp + bksp + bksp +
+			"andmore\r")
+		e.In.WriteString("пароу" + bksp + "ль\r")
+		e.In.WriteString("пароль\r")
+		e.Run(t, "neo-go", "wallet", "init", "--account",
+			"--wallet", walletPath)
+
+		w, err := wallet.NewWalletFromFile(walletPath)
+		require.NoError(t, err)
+		require.Len(t, w.Accounts, 1)
+		require.Equal(t, "букandmore", w.Accounts[0].Label)
+		require.NoError(t, w.Accounts[0].Decrypt("пароль"))
+		w.Close()
+	})
 
 	t.Run("CreateAccount", func(t *testing.T) {
 		e.In.WriteString("testname\r")
diff --git a/go.mod b/go.mod
index e67da8419..83bc560ee 100644
--- a/go.mod
+++ b/go.mod
@@ -23,7 +23,7 @@ require (
 	go.uber.org/atomic v1.4.0
 	go.uber.org/zap v1.10.0
 	golang.org/x/crypto v0.0.0-20190701094942-4def268fd1a4
-	golang.org/x/sys v0.0.0-20200323222414-85ca7c5b95cd // indirect
+	golang.org/x/term v0.0.0-20201210144234-2321bbc49cbf
 	golang.org/x/text v0.3.0
 	golang.org/x/tools v0.0.0-20180318012157-96caea41033d
 	gopkg.in/abiosoft/ishell.v2 v2.0.0
diff --git a/go.sum b/go.sum
index 6194145fe..eefc4bb3a 100644
--- a/go.sum
+++ b/go.sum
@@ -297,8 +297,10 @@ golang.org/x/sys v0.0.0-20191010194322-b09406accb47 h1:/XfQ9z7ib8eEJX2hdgFTZJ/nt
 golang.org/x/sys v0.0.0-20191010194322-b09406accb47/go.mod h1:h1NjWce9XRLGQEsW7wpKNCjG9DtNlClVuFLEZdDNbEs=
 golang.org/x/sys v0.0.0-20200202164722-d101bd2416d5 h1:LfCXLvNmTYH9kEmVgqbnsWfruoXZIrh4YBgqVHtDvw0=
 golang.org/x/sys v0.0.0-20200202164722-d101bd2416d5/go.mod h1:h1NjWce9XRLGQEsW7wpKNCjG9DtNlClVuFLEZdDNbEs=
-golang.org/x/sys v0.0.0-20200323222414-85ca7c5b95cd h1:xhmwyvizuTgC2qz7ZlMluP20uW+C3Rm0FD/WLDX8884=
-golang.org/x/sys v0.0.0-20200323222414-85ca7c5b95cd/go.mod h1:h1NjWce9XRLGQEsW7wpKNCjG9DtNlClVuFLEZdDNbEs=
+golang.org/x/sys v0.0.0-20201119102817-f84b799fce68 h1:nxC68pudNYkKU6jWhgrqdreuFiOQWj1Fs7T3VrH4Pjw=
+golang.org/x/sys v0.0.0-20201119102817-f84b799fce68/go.mod h1:h1NjWce9XRLGQEsW7wpKNCjG9DtNlClVuFLEZdDNbEs=
+golang.org/x/term v0.0.0-20201210144234-2321bbc49cbf h1:MZ2shdL+ZM/XzY3ZGOnh4Nlpnxz5GSOhOmtHo3iPU6M=
+golang.org/x/term v0.0.0-20201210144234-2321bbc49cbf/go.mod h1:bj7SfCRtBDWHUb9snDiAeCFNEtKQo2Wmx5Cou7ajbmo=
 golang.org/x/text v0.3.0 h1:g61tztE5qeGQ89tm6NTjjM9VPIm088od1l6aSorWRWg=
 golang.org/x/text v0.3.0/go.mod h1:NqM8EUOU14njkJ3fqMW+pc6Ldnwhi/IjpwHt7yyuwOQ=
 golang.org/x/tools v0.0.0-20180318012157-96caea41033d h1:Xmo0nLTRYewf0eXDvo12nMSuOgNQ4283hdbOHIUf7h8=