Paranoid TelnetD is a telnetd that supports features like chrooting, allow/deny lists by user, IP address and MAC address, IPv6 support, binding to specific interfaces, and most of all a native authentication system that does not require a user to exist in the main system password database (/etc/passwd). This allows creation of telnet-only users so that if a username/password is sniffed off the network, it can't be used to log into the main system.
Licence
metaftpd is made available under the Gnu Public License version 3, and comes with no warranties or guarentees.