Looking at the location of the errors (/javasource/encryption), this is not about the SFTP module, but about the encryption module. I believe the SFTPModule does not depend on the encyption module.
I would suggest updating the encryption module, although I don't see a version specifically for Mendix 7. Alternatively, since it seems both modules contain an entity called PrivateKey, you could check if the encryption module points to the right entity.
Update
I see that there are errors in the SFTPConnection module. These errors occur when trying to import Java classes which are actually unnecessary. You can safely remove the line
import com.mendix.core.session.UserSession;
from both DisconnectIdleSessions.java and HandleFileSftp.java files.
I encounter this issue today, after including the sftp module into a 6.10.11, I have updated the encryption module also...anyone an idea?