Proxy hard drives are not data encrypted.
There is no on-the-fly encryption done to the contents of the disks. SGOS is a proprietary operating system and does not have a file system. Because of this the contents of any hard drive cannot easily be read without proprietary, in-house tools only available to Symantec. That is to say, the contents could be read, but reading the contents is unlikely.
Symantec destroys the contents of all received hard drives using United States DOD sanitation specifications (DOD 5520.22M). If a drive were to become lost or stolen during shipment, there does exist a chance that the contents could be extracted and read.
It is our recommendation that any organization which values the integrity of the contents of a disk over the cost of keeping and paying for that disk, do so. Many government, military, financial and health customers of Symantec choose to keep and destroy any disks as they see fit.