You may have problems running ftp-proxy chrooted, or at least I have. Even using the chroot-jail functionality in the ftp-proxy startup script, I've had odd results with ftp-proxy's chroot support.
In my tests with version 1.9, ftp-proxy refuses to start, returning the error “Can't determine Group-ID to use”. In my tests with version 1.7 this wasn't a problem, but in transparent mode, ftp-proxy couldn't do DNS resolution properly. You may have better results than I did.
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