diff --git a/CHANGELOG.md b/CHANGELOG.md
index b978987..38c072d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -24,6 +24,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
   a topic filter is set.
 - When we stop probing for socks proxies, replace the cancellation token so future
   probes behave as expected.
+- Properly return an error from the API when trying to connect a proxy if we can't
+  bind the local socket.
 
 ### Deprecated
 
diff --git a/mycelium/src/lib.rs b/mycelium/src/lib.rs
index ffbd4a7..cee9ee2 100644
--- a/mycelium/src/lib.rs
+++ b/mycelium/src/lib.rs
@@ -6,7 +6,7 @@ use std::time::Duration;
 
 use crate::cdn::Cdn;
 use crate::packet_queue::IncomingPacketQueue;
-use crate::proxy::{ConnectionError, Proxy};
+use crate::proxy::{Proxy, ProxyError};
 use crate::tun::TunConfig;
 use bytes::BytesMut;
 use data::DataPlane;
@@ -397,7 +397,7 @@ where
     pub fn connect_proxy(
         &self,
         remote: Option<SocketAddr>,
-    ) -> impl Future<Output = Result<SocketAddr, ConnectionError>> + Send {
+    ) -> impl Future<Output = Result<SocketAddr, ProxyError>> + Send {
         let proxy = self.proxy.clone();
         async move { proxy.connect(remote).await }
     }
diff --git a/mycelium/src/proxy.rs b/mycelium/src/proxy.rs
index 8d55053..99cebe8 100644
--- a/mycelium/src/proxy.rs
+++ b/mycelium/src/proxy.rs
@@ -229,7 +229,7 @@ where
     }
 
     /// Connect to a remote Socks5 proxy. If a proxy address is given, connect to that one. If not, connect to the best (fastest) known proxy.
-    pub async fn connect(&self, remote: Option<SocketAddr>) -> Result<SocketAddr, ConnectionError> {
+    pub async fn connect(&self, remote: Option<SocketAddr>) -> Result<SocketAddr, ProxyError> {
         let target = match remote {
             Some(remote) => remote,
             None => {
@@ -267,7 +267,7 @@ where
 
                 let target: Option<SocketAddr> = futs.filter_map(|o| o).next().await;
                 if target.is_none() {
-                    return Err(ConnectionError { _private: () });
+                    return Err(ConnectionError { _private: () }.into());
                 }
                 // Safe since we just checked the None case above
                 target.unwrap()
@@ -281,7 +281,7 @@ where
             .lock()
             .expect("Can lock chosen remote; qed") = Some(target);
 
-        self.start_proxy();
+        self.start_proxy().await?;
 
         Ok(target)
     }
@@ -300,30 +300,34 @@ where
 
     /// Starts a background task for proxying connections.
     /// This spawns a listener, and proxies all connections to the chosen target.
-    fn start_proxy(&self) {
+    async fn start_proxy(&self) -> Result<(), ProxyError> {
         let target = *self
             .chosen_remote
             .lock()
             .expect("Can lock chosen remote; qed");
         if target.is_none() {
             warn!("Can't start proxy if target is none, this should not happen");
-            return;
+            return Ok(());
         }
         let target = target.unwrap();
         info!(%target, "Starting Socks5 proxy forwarding");
         // First cancel the old token, then set a new token
-        let mut old_token = self.proxy_token.lock().expect("Can lock proxy token; qed");
-        old_token.cancel();
-        let proxy_token = CancellationToken::new();
-        *old_token = proxy_token.clone();
+        // We scope here to drop the lock on old_token as we can't cary that over an await point
+        let proxy_token = {
+            let mut old_token = self.proxy_token.lock().expect("Can lock proxy token; qed");
+            old_token.cancel();
+            let proxy_token = CancellationToken::new();
+            *old_token = proxy_token.clone();
+            proxy_token
+        };
+
+        let listener = TcpListener::bind(("::", DEFAULT_SOCKS5_PORT))
+            .await
+            .inspect_err(|err| {
+                error!(%err, "Could not bind TCP listener");
+            })?;
 
         tokio::spawn(async move {
-            let listener = TcpListener::bind(("::", DEFAULT_SOCKS5_PORT))
-                .await
-                .inspect_err(|err| {
-                    error!(%err, "Could not bind TCP listener");
-                })?;
-
             loop {
                 select! {
                     _ = proxy_token.cancelled() => {
@@ -369,6 +373,39 @@ where
 
             Ok(())
         });
+
+        Ok(())
+    }
+}
+
+#[derive(Debug)]
+pub enum ProxyError {
+    /// No valid proxies found while scanning to auto connect.
+    Connection(ConnectionError),
+    /// IO error while binding local Socks5 listening socket.
+    IO(std::io::Error),
+}
+
+impl std::fmt::Display for ProxyError {
+    fn fmt(&self, f: &mut std::fmt::Formatter<'_>) -> std::fmt::Result {
+        match self {
+            Self::Connection(e) => e.fmt(f),
+            Self::IO(e) => e.fmt(f),
+        }
+    }
+}
+
+impl std::error::Error for ProxyError {}
+
+impl From<ConnectionError> for ProxyError {
+    fn from(value: ConnectionError) -> Self {
+        Self::Connection(value)
+    }
+}
+
+impl From<std::io::Error> for ProxyError {
+    fn from(value: std::io::Error) -> Self {
+        Self::IO(value)
     }
 }