diff --git a/dist/win/contrib/version170-migrate-settings.bat b/dist/win/contrib/version170-migrate-settings.bat
new file mode 100644
index 000000000..94ec16dac
--- /dev/null
+++ b/dist/win/contrib/version170-migrate-settings.bat
@@ -0,0 +1,5 @@
+@echo off
+:: see comments in file ./version170-migrate-settings.ps1
+
+cd %~dp0
+powershell -NoLogo -NonInteractive -ExecutionPolicy Unrestricted -Command .\version170-migrate-settings.ps1
\ No newline at end of file
diff --git a/dist/win/contrib/version170-migrate-settings.ps1 b/dist/win/contrib/version170-migrate-settings.ps1
new file mode 100644
index 000000000..11b9e29e3
--- /dev/null
+++ b/dist/win/contrib/version170-migrate-settings.ps1
@@ -0,0 +1,45 @@
+# This script migrates Cryptomator settings for all local users on Windows in case the users uses custom directories as mountpoint
+# See also https://github.com/cryptomator/cryptomator/pull/2654.
+#
+# TODO: This script should be evaluated in a yearly interval if it is still needed and if not, should be removed
+#
+#Requires -RunAsAdministrator
+
+#Get all active, local user profiles
+$profileList = 'HKLM:\SOFTWARE\Microsoft\Windows NT\CurrentVersion\ProfileList'
+$localUsers = Get-LocalUser | Where-Object {$_.Enabled} | ForEach-Object { $_.Name}
+
+Get-ChildItem $profileList | ForEach-Object { $_.GetValue("ProfileImagePath") } | Where-Object {
+    $profileNameMatches = ($_ | Select-String -Pattern "\\([^\\]+)$").Matches
+    if($profileNameMatches.Count -eq 1) {
+        #check if the last path part is contained in the local user name list
+        #otherwise do not touch it
+        return $localUsers.Contains($profileNameMatches[0].Groups[1].Value)
+    } else {
+        return $false;
+    }
+} | ForEach-Object {
+    $settingsPath = "$_\AppData\Roaming\Cryptomator\settings.json"
+    if(!(Test-Path -Path $settingsPath -PathType Leaf)) {
+        #No settings file, nothing to do.
+        return;
+    }
+    $settings = Get-Content -Path $settingsPath | ConvertFrom-Json
+    if($settings.preferredVolumeImpl -ne "FUSE") {
+        #Fuse not used, nothing to do
+        return;
+    }
+
+    #check if customMountPoints are used
+    $atLeastOneCustomPath = $false;
+    foreach ($vault in $settings.directories){
+        $atLeastOneCustomPath = $atLeastOneCustomPath -or ($vault.useCustomMountPath -eq "True")
+    }
+
+    #if so, use WinFsp Local Drive
+    if( $atLeastOneCustomPath ) {
+        Add-Member -Force -InputObject $settings -Name "mountService" -Value "org.cryptomator.frontend.fuse.mount.WinFspMountProvider" -MemberType NoteProperty
+        $newSettings  = $settings | Select-Object * -ExcludeProperty "preferredVolumeImpl"
+        ConvertTo-Json $newSettings | Set-Content -Path $settingsPath
+    }
+}
diff --git a/dist/win/resources/main.wxs b/dist/win/resources/main.wxs
index d6247bf05..1fb7b552d 100644
--- a/dist/win/resources/main.wxs
+++ b/dist/win/resources/main.wxs
@@ -132,6 +132,9 @@
     <!-- WebDAV patches -->
     <CustomAction Id="PatchWebDAV" Impersonate="no" ExeCommand="[INSTALLDIR]patchWebDAV.bat" Directory="INSTALLDIR" Execute="deferred" Return="asyncWait" />
 
+    <!-- Special Settings migration for 1.7.0,. Should be removed eventually, for more info, see ../contrib/version170-migrate-settings.ps1-->
+    <CustomAction Id="V170MigrateSettings" Impersonate="no" ExeCommand="[INSTALLDIR]version170-migrate-settings.bat" Directory="INSTALLDIR" Execute="deferred" Return="asyncWait" />
+
     <!-- Running App detection and exit -->
     <Property Id="FOUNDRUNNINGAPP" Admin="yes"/>
     <util:CloseApplication
@@ -182,6 +185,7 @@
       <RemoveExistingProducts After="InstallValidate"/>
 
       <Custom Action="PatchWebDAV" After="InstallFiles">NOT Installed OR REINSTALL</Custom>
+      <Custom Action="V170MigrateSettings" After="InstallFiles">NOT Installed OR REINSTALL</Custom>
     </InstallExecuteSequence>
 
     <WixVariable Id="WixUIBannerBmp" Value="$(env.JP_WIXWIZARD_RESOURCES)\banner.bmp" />