Hello,
yes, it's memory related problem.
You have to disable every memory consuming setting in user_config.h like UDP and DNS.
In next MQX release (3.5), there will be introduced bugfix which sets smaller buffer sizes for RX on all used sockets (listen, control, data).
And you should also try to use special ethernet initialization sequence, which can be found for example in security_webserver demo.
With all savings above I was able to execute all ftp client commands in RTCS shell example (except for put/get, because there was no storage used).
PetrM