A system for protecting data stored on a device. The system has a server for assigning encryption/decryption keys and one or more peripheral devices. The peripheral devices have a network interface to connect to the server to receive the keys, a host interface to couple to host devices, and an encryption/decryption engine for processing files transferred between the host devices and the peripheral devices. In this fashion, the peripheral devices use the keys to encrypt and decrypt data stored on the host devices.