Basic instructions on how to set up an SSH server on an Ubuntu 16.04/18.04 EC2 instance.

Step 1 – Create a New User

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sudo adduser testuser

Step 2 – Create a Directory for File Transfers

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sudo mkdir -p /var/sftp/uploads
sudo chown root:root /var/sftp
sudo chmod 755 /var/sftp
sudo chown testuser:testuser /var/sftp/uploads

Step 3 – Restrict Access to One Directory

Open the SSH server configuration file

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sudo nano /etc/ssh/sshd_config

Add the following to the bottom of the file:

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Match User testuser
ForceCommand internal-sftp
PasswordAuthentication yes
ChrootDirectory /var/sftp
PermitTunnel no
AllowAgentForwarding no
AllowTcpForwarding no
X11Forwarding no

Apply the configuration changes

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sudo systemctl restart sshd

Step 4 – Verify the Configuration

Verify the user cannot via SSH

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ssh testuser@localhost

Verify the user can connect via SFTP

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sftp testuser@localhost