Configuration

$ diff -u /etc/ssh/sshd_config{.orig,}
-Subsystem sftp /usr/lib/openssh/sftp-server
+#Subsystem sftp /usr/lib/openssh/sftp-server
...
+
+Subsystem sftp internal-sftp
+Match Group sftp
+  ChrootDirectory /srv/sftp
+  ForceCommand internal-sftp -d %u -u 0007
+  AllowAgentForwarding no
+  AllowTcpForwarding no
+  PermitTunnel no
+  X11Forwarding no

$ mkdir -p /srv/sftp
$ chown root:root /srv/sftp
$ chmod 755 /srv/sftp

$ sudo groupadd -r sftp

$ sudo useradd -M -d /jhacker -s /usr/sbin/nologin -g sftp -c "J. Random Hacker" jhacker

$ mkdir -p /srv/sftp/jhacker
$ chown jhacker:sftp /srv/sftp/jhacker
$ chmod 700 /srv/sftp/jhacker

$ touch /srv/sftp/jhacker/.hushlogin
$ chmod 400 /srv/sftp/jhacker/.hushlogin

Reference

See Also