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AxCrypt encrypts the files exactly as advertised. The problem is that you haven’t set the syncing options correctly.

I’ll hazard a guess that your Dropbox settings are set to sync everything on your desktop (assuming your explanation is accurate) and Dropbox has automatically uploaded it prior to it being encrypted. You’ve then gone to download it and one of the following has occurred:

  1. Dropbox has found the file encrypted and then attempted to open a previous version (which was unencrypted)
  2. Dropbox has downloaded the file, AxCrypt is still logged in and the file has been decrypted automatically
  3. Dropbox has simply linked to the pointer file on your desktop and AxCrypt has decrypted it automatically

Dropbox is a service you should stay away from if you value your privacy. There are plenty of better alternatives out there but be prepared to pay for them.

The following services provide true zero-knowledge encryption:

If used correctly AxCrypt is a cheaper alternative to using the above cloud services but you are responsible for understanding how Dropbox works and making sure they aren’t copying unencrypted data to the cloud. You also have to trust Dropbox aren’t complying with any secret orders in relation to your account.

If you read Dropbox’s terms and conditions you’ll find they’ll release data to any agency upon demand subject to them satisfying themselves it’s necessary. With a zero-knowledge cloud, or AxCrypt encryption properly used, only you’ll be able to read the encrypted data.