diff --git a/src/qt/optionsmodel.cpp b/src/qt/optionsmodel.cpp
--- a/src/qt/optionsmodel.cpp
+++ b/src/qt/optionsmodel.cpp
@@ -24,6 +24,8 @@
 
 const char *DEFAULT_GUI_PROXY_HOST = "127.0.0.1";
 
+static const QString GetDefaultProxyAddress();
+
 OptionsModel::OptionsModel(interfaces::Node &node, QObject *parent,
                            bool resetSettings)
     : QAbstractListModel(parent), m_node(node) {
@@ -149,9 +151,7 @@
         settings.setValue("fUseProxy", false);
     }
     if (!settings.contains("addrProxy")) {
-        settings.setValue("addrProxy",
-                          QString("%1:%2").arg(DEFAULT_GUI_PROXY_HOST,
-                                               DEFAULT_GUI_PROXY_PORT));
+        settings.setValue("addrProxy", GetDefaultProxyAddress());
     }
     // Only try to set -proxy, if user has enabled fUseProxy
     if (settings.value("fUseProxy").toBool() &&
@@ -167,9 +167,7 @@
         settings.setValue("fUseSeparateProxyTor", false);
     }
     if (!settings.contains("addrSeparateProxyTor")) {
-        settings.setValue("addrSeparateProxyTor",
-                          QString("%1:%2").arg(DEFAULT_GUI_PROXY_HOST,
-                                               DEFAULT_GUI_PROXY_PORT));
+        settings.setValue("addrSeparateProxyTor", GetDefaultProxyAddress());
     }
     // Only try to set -onion, if user has enabled fUseSeparateProxyTor
     if (settings.value("fUseSeparateProxyTor").toBool() &&
@@ -249,6 +247,12 @@
     settings.setValue(name, ip_port.ip + ":" + ip_port.port);
 }
 
+static const QString GetDefaultProxyAddress() {
+    return QString("%1:%2")
+        .arg(DEFAULT_GUI_PROXY_HOST)
+        .arg(DEFAULT_GUI_PROXY_PORT);
+}
+
 // read QSettings values and return them
 QVariant OptionsModel::data(const QModelIndex &index, int role) const {
     if (role == Qt::EditRole) {
@@ -502,4 +506,18 @@
 
         settings.setValue(strSettingsVersionKey, CLIENT_VERSION);
     }
+
+    // Overwrite the 'addrProxy' setting in case it has been set to an illegal
+    // default value (see issue #12623; PR #12650).
+    if (settings.contains("addrProxy") &&
+        settings.value("addrProxy").toString().endsWith("%2")) {
+        settings.setValue("addrProxy", GetDefaultProxyAddress());
+    }
+
+    // Overwrite the 'addrSeparateProxyTor' setting in case it has been set to
+    // an illegal default value (see issue #12623; PR #12650).
+    if (settings.contains("addrSeparateProxyTor") &&
+        settings.value("addrSeparateProxyTor").toString().endsWith("%2")) {
+        settings.setValue("addrSeparateProxyTor", GetDefaultProxyAddress());
+    }
 }