diff --git a/src/Simplex/FileTransfer/Server.hs b/src/Simplex/FileTransfer/Server.hs
index ae202c2b0..a58733904 100644
--- a/src/Simplex/FileTransfer/Server.hs
+++ b/src/Simplex/FileTransfer/Server.hs
@@ -21,12 +21,12 @@ import qualified Data.ByteString.Base64.URL as B64
 import Data.ByteString.Builder (byteString)
 import Data.ByteString.Char8 (ByteString)
 import qualified Data.ByteString.Char8 as B
-import Data.Functor (($>))
 import Data.Int (Int64)
 import Data.List (intercalate)
 import Data.List.NonEmpty (NonEmpty)
 import qualified Data.List.NonEmpty as L
 import qualified Data.Map.Strict as M
+import Data.Maybe (fromMaybe, isJust)
 import qualified Data.Text as T
 import Data.Time.Clock (UTCTime (..), diffTimeToPicoseconds, getCurrentTime)
 import Data.Time.Clock.System (SystemTime (..), getSystemTime)
@@ -346,35 +346,38 @@ processXFTPRequest HTTP2Body {bodyPart} = \case
         pure $ FRRcvIds rIds
       pure $ either FRErr id r
     receiveServerFile :: FileRec -> M FileResponse
-    receiveServerFile fr@FileRec {senderId, fileInfo} = case bodyPart of
-      -- TODO do not allow repeated file upload
+    receiveServerFile FileRec {senderId, fileInfo = FileInfo {size, digest}, filePath} = case bodyPart of
       Nothing -> pure $ FRErr SIZE
-      Just getBody -> do
-        -- TODO validate body size before downloading, once it's populated
-        path <- asks $ filesPath . config
-        let fPath = path </> B.unpack (B64.encode senderId)
-            FileInfo {size, digest} = fileInfo
-        withFileLog $ \sl -> logPutFile sl senderId fPath
-        st <- asks store
-        quota_ <- asks $ fileSizeQuota . config
-        -- TODO timeout file upload, remove partially uploaded files
-        stats <- asks serverStats
-        liftIO $
-          runExceptT (receiveFile getBody (XFTPRcvChunkSpec fPath size digest)) >>= \case
-            Right () -> do
-              used <- readTVarIO $ usedStorage st
-              if maybe False (used + fromIntegral size >) quota_
-                then remove fPath $> FRErr QUOTA
-                else do
-                  atomically (setFilePath' st fr fPath)
-                  atomically $ modifyTVar' (filesUploaded stats) (+ 1)
-                  atomically $ modifyTVar' (filesCount stats) (+ 1)
-                  atomically $ modifyTVar' (filesSize stats) (+ fromIntegral size)
-                  pure FROk
-            Left e -> remove fPath $> FRErr e
+      -- TODO validate body size from request before downloading, once it's populated
+      Just getBody -> checkDuplicate $ ifM reserve receive (pure $ FRErr QUOTA)
         where
-          remove fPath = whenM (doesFileExist fPath) (removeFile fPath) `catch` logFileError
-
+          reserve = do
+            us <- asks $ usedStorage . store
+            quota <- asks $ fromMaybe maxBound . fileSizeQuota . config
+            atomically . stateTVar us $
+              \used -> let used' = used + fromIntegral size in if used' <= quota then (True, used') else (False, used)
+          receive = do
+            path <- asks $ filesPath . config
+            let fPath = path </> B.unpack (B64.encode senderId)
+            receiveChunk (XFTPRcvChunkSpec fPath size digest) >>= \case
+              Right () -> do
+                stats <- asks serverStats
+                withFileLog $ \sl -> logPutFile sl senderId fPath
+                atomically $ writeTVar filePath (Just fPath)
+                atomically $ modifyTVar' (filesUploaded stats) (+ 1)
+                atomically $ modifyTVar' (filesCount stats) (+ 1)
+                atomically $ modifyTVar' (filesSize stats) (+ fromIntegral size)
+                pure FROk
+              Left e -> do
+                us <- asks $ usedStorage . store
+                atomically . modifyTVar' us $ subtract (fromIntegral size)
+                liftIO $ whenM (doesFileExist fPath) (removeFile fPath) `catch` logFileError
+                pure $ FRErr e
+          receiveChunk spec = do
+            t <- asks $ fileTimeout . config
+            liftIO $ fromMaybe (Left TIMEOUT) <$> timeout t (runExceptT (receiveFile getBody spec) `catchAll_` pure (Left FILE_IO))
+      where
+        checkDuplicate = ifM (isJust <$> readTVarIO filePath) (pure $ FRErr DUPLICATE_)
     sendServerFile :: FileRec -> RcvPublicDhKey -> M (FileResponse, Maybe ServerFile)
     sendServerFile FileRec {senderId, filePath, fileInfo = FileInfo {size}} rDhKey = do
       readTVarIO filePath >>= \case
diff --git a/src/Simplex/FileTransfer/Server/Env.hs b/src/Simplex/FileTransfer/Server/Env.hs
index 4d5d67b07..22ec98863 100644
--- a/src/Simplex/FileTransfer/Server/Env.hs
+++ b/src/Simplex/FileTransfer/Server/Env.hs
@@ -47,6 +47,8 @@ data XFTPServerConfig = XFTPServerConfig
     newFileBasicAuth :: Maybe BasicAuth,
     -- | time after which the files can be removed and check interval, seconds
     fileExpiration :: Maybe ExpirationConfig,
+    -- | timeout to receive file
+    fileTimeout :: Int,
     -- | time after which inactive clients can be disconnected and check interval, seconds
     inactiveClientExpiration :: Maybe ExpirationConfig,
     -- CA certificate private key is not needed for initialization
diff --git a/src/Simplex/FileTransfer/Server/Main.hs b/src/Simplex/FileTransfer/Server/Main.hs
index 4533fbe8c..269ada69a 100644
--- a/src/Simplex/FileTransfer/Server/Main.hs
+++ b/src/Simplex/FileTransfer/Server/Main.hs
@@ -160,6 +160,7 @@ xftpServerCLI cfgPath logPath = do
                   defaultFileExpiration
                     { ttl = 3600 * readIniDefault defFileExpirationHours "STORE_LOG" "expire_files_hours" ini
                     },
+              fileTimeout = 10 * 60 * 1000000, -- 10 mins to send 4mb chunk
               inactiveClientExpiration =
                 settingIsOn "INACTIVE_CLIENTS" "disconnect" ini
                   $> ExpirationConfig
diff --git a/src/Simplex/FileTransfer/Server/Store.hs b/src/Simplex/FileTransfer/Server/Store.hs
index a3681944e..f9c915714 100644
--- a/src/Simplex/FileTransfer/Server/Store.hs
+++ b/src/Simplex/FileTransfer/Server/Store.hs
@@ -11,7 +11,6 @@ module Simplex.FileTransfer.Server.Store
     newFileStore,
     addFile,
     setFilePath,
-    setFilePath',
     addRecipient,
     deleteFile,
     deleteRecipient,
@@ -79,12 +78,10 @@ newFileRec senderId fileInfo createdAt = do
 
 setFilePath :: FileStore -> SenderId -> FilePath -> STM (Either XFTPErrorType ())
 setFilePath st sId fPath =
-  withFile st sId $ \fr -> setFilePath' st fr fPath $> Right ()
-
-setFilePath' :: FileStore -> FileRec -> FilePath -> STM ()
-setFilePath' st FileRec {fileInfo, filePath} fPath = do
-  writeTVar filePath (Just fPath)
-  modifyTVar' (usedStorage st) (+ fromIntegral (size fileInfo))
+  withFile st sId $ \FileRec {fileInfo, filePath} -> do
+    writeTVar filePath (Just fPath)
+    modifyTVar' (usedStorage st) (+ fromIntegral (size fileInfo))
+    pure $ Right ()
 
 addRecipient :: FileStore -> SenderId -> FileRecipient -> STM (Either XFTPErrorType ())
 addRecipient st@FileStore {recipients} senderId (FileRecipient rId rKey) =
diff --git a/src/Simplex/FileTransfer/Transport.hs b/src/Simplex/FileTransfer/Transport.hs
index 464a75ac8..54baf57ac 100644
--- a/src/Simplex/FileTransfer/Transport.hs
+++ b/src/Simplex/FileTransfer/Transport.hs
@@ -157,6 +157,8 @@ data XFTPErrorType
     HAS_FILE
   | -- | file IO error
     FILE_IO
+  | -- | file sending timeout
+    TIMEOUT
   | -- | bad redirect data
     REDIRECT {redirectError :: String}
   | -- | internal server error
@@ -188,6 +190,7 @@ instance Encoding XFTPErrorType where
     NO_FILE -> "NO_FILE"
     HAS_FILE -> "HAS_FILE"
     FILE_IO -> "FILE_IO"
+    TIMEOUT -> "TIMEOUT"
     REDIRECT err -> "REDIRECT " <> smpEncode err
     INTERNAL -> "INTERNAL"
     DUPLICATE_ -> "DUPLICATE_"
@@ -205,6 +208,7 @@ instance Encoding XFTPErrorType where
       "NO_FILE" -> pure NO_FILE
       "HAS_FILE" -> pure HAS_FILE
       "FILE_IO" -> pure FILE_IO
+      "TIMEOUT" -> pure TIMEOUT
       "REDIRECT" -> REDIRECT <$> _smpP
       "INTERNAL" -> pure INTERNAL
       "DUPLICATE_" -> pure DUPLICATE_
diff --git a/tests/XFTPClient.hs b/tests/XFTPClient.hs
index af4e6dd36..e411ea42b 100644
--- a/tests/XFTPClient.hs
+++ b/tests/XFTPClient.hs
@@ -106,6 +106,7 @@ testXFTPServerConfig =
       allowNewFiles = True,
       newFileBasicAuth = Nothing,
       fileExpiration = Just defaultFileExpiration,
+      fileTimeout = 10000000,
       inactiveClientExpiration = Just defaultInactiveClientExpiration,
       caCertificateFile = "tests/fixtures/ca.crt",
       privateKeyFile = "tests/fixtures/server.key",