When connecting to certain hosts via SFTP, I get an error that says "Transfer Error: Failed initialization". For example: dante.u.washington.edu. It does not matter what username or password you use, you get the same error.
I had a similar problem with Panic's Prompt app, which has since been fixed in their app. They found that it was an issue with libssh2. If you are also using libssh2, the following discussion may help: http://comments.gmane.org/gmane.network.ssh.libssh2.devel/5414 .
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