diff --git a/docs/rfcs/files.mmd b/docs/rfcs/files.mmd
new file mode 100644
index 0000000000..4431726b77
--- /dev/null
+++ b/docs/rfcs/files.mmd
@@ -0,0 +1,129 @@
+sequenceDiagram
+  participant AU as Alice's<br>chat UI
+  participant AC as Alice's<br>chat core
+  participant AA as Alice's<br>agent
+  participant BA as Bob's<br>agent
+  participant BC as Bob's<br>chat
+  participant BU as Bob's<br>chat UI
+
+  note over AU, AA: Alice's app
+  note over BA, BU: Bob's app
+
+  note over AU, BU: Direct file transfer handshake
+
+  note over AU: Send message with file
+  AU ->> AC: APISendMessage with filePath
+  AC ->> AA: createConnection
+  AA ->> AC: connId, fileConnReq
+  note left of AC: createSndFileTransfer<br>files.ci_file_status = CIFSSndStored<br>snd_files.file_status = FSNew<br>connections.conn_type = ConnSndFile<br>connections.conn_status = ConnNew
+  AC ->> BC: XMsgNew with FileInvitation, fileConnReq = fileConnReq
+  note right of BC: createRcvFileTransfer<br>files.ci_file_status = CIFSRcvInvitation<br>rcv_files.file_status = FSNew<br>rcv_files.file_queue_info = fileConnReq
+  BC ->> BU: CRNewChatItem
+  note over BU: Accept file
+  BU ->> BC: ReceiveFile
+  BC ->> BA: joinConnection with ConnInfo = XFileAcpt
+  BA ->> BC: connId
+  note right of BC: acceptRcvFileTransfer<br>files.ci_file_status = CIFSRcvAccepted<br>rcv_files.file_status = FSAccepted<br>connections.conn_type = ConnRcvFile<br>connections.conn_status = ConnJoined
+  BA ->> AC: CONF with XFileAcpt
+  note left of AC: snd_files.file_status = FSAccepted
+  AC ->> AA: allowConnection
+  note left of AC: connections.conn_status = ConnAccepted
+  note over AA, BA: ...<br>Connection handshake<br>...
+  par Alice connected
+    AA ->> AC: CON
+    note left of AC: connections.conn_status = ConnReady<br>snd_files.file_status = FSConnected<br>files.ci_file_status = CIFSSndTransfer
+    AC ->> AU: CRSndFileStart
+    note over AC: sendFileChunk
+  and Bob Connected
+    BA ->> BC: CON
+    note right of BC: connections.conn_status = ConnReady<br>rcv_files.file_status = FSConnected<br>files.ci_file_status = CIFSRcvTransfer
+    BC ->> BU: CRRcvFileStart
+  end
+
+  note over AU, BU: Group file transfer handshake
+
+  note over AU: Send message with file
+  AU ->> AC: APISendMessage with filePath
+  note left of AC: createSndGroupFileTransfer<br>files.ci_file_status = CIFSSndStored
+  AC ->> BC: XMsgNew with FileInvitation, fileConnReq = Nothing
+  note right of BC: createRcvGroupFileTransfer<br>files.ci_file_status = CIFSRcvInvitation<br>rcv_files.file_status = FSNew<br>rcv_files.file_queue_info = NULL
+  BC ->> BU: CRNewChatItem
+  note over BU: Accept file
+  BU ->> BC: ReceiveFile
+  BC ->> BA: createConnection
+  BA ->> BC: connId, fileInvConnReq
+  note right of BC: acceptRcvFileTransfer<br>files.ci_file_status = CIFSRcvAccepted<br>rcv_files.file_status = FSAccepted<br>connections.conn_type = ConnRcvFile<br>connections.conn_status = ConnNew
+  BC ->> AC: XFileAcptInv sharedMsgId fileInvConnReq
+  AC ->> AA: joinConnection with ConnInfo = XOk
+  AA ->> AC: connId
+  note left of AC: createSndGroupFileTransferConnection<br>connections.conn_type = ConnSndFile<br>connections.conn_status = ConnNew<br>snd_files.file_status = FSAccepted
+  AA ->> BC: CONF with XOk
+  BC ->> BA: allowConnection
+  note right of BC: connections.conn_status = ConnAccepted
+  note over AA, BA: ...<br>Connection handshake<br>...
+  par Alice connected
+    AA ->> AC: CON
+    note left of AC: connections.conn_status = ConnReady<br>snd_files.file_status = FSConnected<br>files.ci_file_status = CIFSSndTransfer
+    AC ->> AU: CRSndFileStart
+    note over AC: sendFileChunk
+  and Bob Connected
+    BA ->> BC: CON
+    note right of BC: connections.conn_status = ConnReady<br>rcv_files.file_status = FSConnected<br>files.ci_file_status = CIFSRcvTransfer
+    BC ->> BU: CRRcvFileStart
+  end
+
+  note over AU, BU: File transfer
+
+  loop while createSndFileChunk returns chunkNo
+    AC ->> BC: FileChunk
+    AA ->> AC: SENT
+    note over BC: appendFileChunk
+  end
+  opt receiver cancelled file transfer
+    note over BU: Cancel file
+    BU ->> BC: CancelFile
+    note right of BC: files.cancelled = true<br>files.ci_file_status = CIFSRcvCancelled<br>rcv_files.file_status = FSCancelled<br>deleteRcvFileChunks
+    BC ->> BA: deleteConnection
+    BC ->> BU: CRRcvFileSndCancelled
+    note over AA, BA: connection is deleted
+    AC ->> BA: FileChunk
+    BA ->> AA: MERR AUTH
+    AA ->> AC: MERR
+    note over AC: cancelSndFileTransfer
+    alt AUTH
+      AC ->> AU: CRSndFileRcvCancelled
+    else other error, possibly not due to cancel
+      AC ->> AU: CEFileSend
+    end
+  end
+  AC ->> BC: Final FileChunk
+  note left of AC: snd_files.file_status = FSComplete<br>deleteSndFileChunks<br>files.ci_file_status = CIFSSndComplete
+  AC ->> AU: CRSndFileComplete
+  AC ->> AA: deleteConnection
+  note over BC: appendFileChunk
+  note right of BC: rcv_files.file_status = FSComplete<br>files.ci_file_status = CIFSRcvComplete<br>deleteRcvFileChunks
+  BC ->> BU: CRRcvFileComplete
+  BC ->> BA: deleteConnection
+
+  note over AU, BU: Sender cancels file transfer
+
+  note over AU: Cancel file
+  AU ->> AC: CancelFile
+  note left of AC: files.cancelled = true<br>files.ci_file_status = CIFSSndCancelled<br>snd_files.file_status = FSCancelled<br>deleteSndFileChunks
+  AC ->> BA: FileChunkCancel (over file connection)
+  note left of AC: deleteConnection
+  AC ->> BA: XFileCancel (over direct/group connection)
+  AC ->> AU: CRSndGroupFileCancelled
+  par FileChunkCancel
+    BA ->> BC: FileChunkCancel
+    note over BC: Cancel file (if it wasn't already cancelled)
+    note right of BC: files.cancelled = true<br>files.ci_file_status = CIFSRcvCancelled<br>rcv_files.file_status = FSCancelled<br>deleteRcvFileChunks
+    BC ->> BA: deleteConnection
+    BC ->> BU: CRRcvFileSndCancelled
+  and XFileCancel
+    BA ->> BC: XFileCancel
+    note over BC: Cancel file (if it wasn't already cancelled)
+    note right of BC: files.cancelled = true<br>files.ci_file_status = CIFSRcvCancelled<br>rcv_files.file_status = FSCancelled<br>deleteRcvFileChunks
+    BC ->> BA: deleteConnection
+    BC ->> BU: CRRcvFileSndCancelled
+  end
diff --git a/src/Simplex/Chat.hs b/src/Simplex/Chat.hs
index 2bd6bdfd00..bbc8000c28 100644
--- a/src/Simplex/Chat.hs
+++ b/src/Simplex/Chat.hs
@@ -842,7 +842,7 @@ acceptFileReceive user@User {userId} RcvFileTransfer {fileId, fileInvitation = F
       tryError (withAgent $ \a -> joinConnection a connReq . directMessage $ XFileAcpt fName) >>= \case
         Right agentConnId -> do
           filePath <- getRcvFilePath filePath_ fName
-          withStore $ \st -> acceptRcvFileTransfer st user fileId agentConnId filePath
+          withStore $ \st -> acceptRcvFileTransfer st user fileId agentConnId ConnJoined filePath
         Left e -> throwError e
     -- group file protocol
     Nothing ->
@@ -855,7 +855,7 @@ acceptFileReceive user@User {userId} RcvFileTransfer {fileId, fileInvitation = F
               sharedMsgId <- withStore $ \st -> getSharedMsgIdByFileId st userId fileId
               (agentConnId, fileInvConnReq) <- withAgent (`createConnection` SCMInvitation)
               filePath <- getRcvFilePath filePath_ fName
-              ci <- withStore $ \st -> acceptRcvFileTransfer st user fileId agentConnId filePath
+              ci <- withStore $ \st -> acceptRcvFileTransfer st user fileId agentConnId ConnNew filePath
               void $ sendDirectMessage conn (XFileAcptInv sharedMsgId fileInvConnReq fName) (GroupId groupId)
               pure ci
             _ -> throwChatError $ CEFileInternal "member connection not active"
@@ -1836,16 +1836,18 @@ parseFileChunk msg =
 appendFileChunk :: ChatMonad m => RcvFileTransfer -> Integer -> ByteString -> m ()
 appendFileChunk ft@RcvFileTransfer {fileId, fileStatus} chunkNo chunk =
   case fileStatus of
-    RFSConnected RcvFileInfo {filePath} -> do
-      fsFilePath <- toFSFilePath filePath
-      append_ filePath fsFilePath
+    RFSConnected RcvFileInfo {filePath} -> append_ filePath
+    -- sometimes update of file transfer status to FSConnected
+    -- doesn't complete in time before MSG with first file chunk
+    RFSAccepted RcvFileInfo {filePath} -> append_ filePath
     RFSCancelled _ -> pure ()
     _ -> throwChatError $ CEFileInternal "receiving file transfer not in progress"
   where
-    append_ fPath fPathUsed = do
-      h <- getFileHandle fileId fPathUsed rcvFiles AppendMode
+    append_ filePath = do
+      fsFilePath <- toFSFilePath filePath
+      h <- getFileHandle fileId fsFilePath rcvFiles AppendMode
       E.try (liftIO $ B.hPut h chunk >> hFlush h) >>= \case
-        Left (e :: E.SomeException) -> throwChatError . CEFileWrite fPath $ show e
+        Left (e :: E.SomeException) -> throwChatError . CEFileWrite fsFilePath $ show e
         Right () -> withStore $ \st -> updatedRcvFileChunkStored st ft chunkNo
 
 getFileHandle :: ChatMonad m => Int64 -> FilePath -> (ChatController -> TVar (Map Int64 Handle)) -> IOMode -> m Handle
diff --git a/src/Simplex/Chat/Store.hs b/src/Simplex/Chat/Store.hs
index 30e8f8a4d2..c08406646a 100644
--- a/src/Simplex/Chat/Store.hs
+++ b/src/Simplex/Chat/Store.hs
@@ -2025,8 +2025,8 @@ createRcvGroupFileTransfer st userId GroupMember {groupId, groupMemberId, localD
     currentTs <- getCurrentTime
     DB.execute
       db
-      "INSERT INTO files (user_id, group_id, file_name, file_size, chunk_size, created_at, updated_at) VALUES (?,?,?,?,?,?,?)"
-      (userId, groupId, fileName, fileSize, chunkSize, currentTs, currentTs)
+      "INSERT INTO files (user_id, group_id, file_name, file_size, chunk_size, ci_file_status, created_at, updated_at) VALUES (?,?,?,?,?,?,?,?)"
+      (userId, groupId, fileName, fileSize, chunkSize, CIFSRcvInvitation, currentTs, currentTs)
     fileId <- insertedRowId db
     DB.execute
       db
@@ -2082,8 +2082,8 @@ getRcvFileTransfer_ db userId fileId =
         cancelled = fromMaybe False cancelled_
     rcvFileTransfer _ = Left $ SERcvFileNotFound fileId
 
-acceptRcvFileTransfer :: StoreMonad m => SQLiteStore -> User -> Int64 -> ConnId -> FilePath -> m AChatItem
-acceptRcvFileTransfer st user@User {userId} fileId agentConnId filePath =
+acceptRcvFileTransfer :: StoreMonad m => SQLiteStore -> User -> Int64 -> ConnId -> ConnStatus -> FilePath -> m AChatItem
+acceptRcvFileTransfer st user@User {userId} fileId agentConnId connStatus filePath =
   liftIOEither . withTransaction st $ \db -> do
     currentTs <- getCurrentTime
     DB.execute
@@ -2097,7 +2097,7 @@ acceptRcvFileTransfer st user@User {userId} fileId agentConnId filePath =
     DB.execute
       db
       "INSERT INTO connections (agent_conn_id, conn_status, conn_type, rcv_file_id, user_id, created_at, updated_at) VALUES (?,?,?,?,?,?,?)"
-      (agentConnId, ConnJoined, ConnRcvFile, fileId, userId, currentTs, currentTs)
+      (agentConnId, connStatus, ConnRcvFile, fileId, userId, currentTs, currentTs)
     getChatItemByFileId_ db user fileId
 
 updateRcvFileStatus :: MonadUnliftIO m => SQLiteStore -> RcvFileTransfer -> FileStatus -> m ()