Have you started with the latest version of WinSCP? Or were you using older version earlier? Did you try restarting the machine?
Have you seen other posts about the error?
This one for example (but do google for others too):
WinSCP process terminated with exit code 3

Hello Team,

We are using WinSCPnet (1.14.0.13674) .NET assembly in our project which is generating WinSCP exe (WinSCP.6.1.0). So when it is validating SFTP configuration using this .NET assembly, it is giving us below error.

WinSCP process terminated with exit code 3. There was no output.
Response log file wscp2034.008A793E.tmp was not created.
This could indicate lack of write permissions to the log folder or problems starting WinSCP itself.

Please note this error only comes when the code is executed from the Windows Service. This worked for 3-4 days. But since then it is giving the same error. If we hit the code forcefully using any button (not using Windows Service) then it is working perfectly fine, but using Windows Service it is not working.

Please let me know your reply, in case we can solve the issue for Windows Service.

Regards,
Bhaumik