To be less indenciary with the title: Google marked the website as harmful for hosting harmful content, which it was, but which has now been removed, and the recognition has not been updated.
It could be caching, or it could be a policy thing. Websites that once hosted harmful content are probably much more likely than average to host it again. I do hope this can be reverted of course, I understand that the intention was not to be harmful (not that that would prevent a bad actor from pointing people to your download).
Have you made sure your robots.txt allows Google to scan and properly identify that the files have disappeared?
Also, how long have you waited? I wouldn't be surprised if it takes a few days for these sorts of things to make it through all the relevant systems. I do realise that's not very comforting when users are unable to use a website!
As an aside, to prevent this in the future perhaps, you mention that the files were encrypted. This should have prevented this because Google shouldn't be able to decrypt the file to understand that it is malware. Did you do the encryption from scratch or did you distribute the same encrypted file that might have been previously known about publicly, where Google might be able to pattern-match to known bad files? I would imagine you should be safe zipping and then encrypting the zip with your own encryption.
Disclosure: I do work at Google, but not on anything related to this, this is all just personal opinion based on work outside of Google.