If you are trying to load a patch from a library that is in (you haven’t activated it yet), Kontakt will often allow the first few patches to load for 15 minutes. After that, or if you load a different patch, you will get the encryption error.
Kontakt libraries are tied to your Native Instruments account. Even if you have the files on your hard drive, Kontakt needs to "phone home" to the Native Access app to decrypt the patch. If the library isn't listed in your account or isn't activated, the handshake fails. kontakt this patch is encrypted and cannot be loaded