Ask HN: Legality of hosting encrypted files?

Lately I've been thinking about the legal ramifications of hosting encrypted copyrighted data.

If person X encrypts a copyrighted file with some algorithm/key, posts this encrypted file on hosting site A, and then shares the algorithm/key what would be the legal ramifications to hosting site A?

The hosting site could claim ignorance and saying that they are not hosting copyrighted data. In response the owner of the copyrighted data could show that through a series of transformations the data is the copyrighted data. That being said, can't any data be "transformed" to be that same copyrighted file?

Thanks for reading and looking forward to some feedback!