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Hello BM,
The message “No magic Guid was found.” means that the file you attempt to work with does not pass the first check – to see if it starts with a unique sequence of 16 bytes that all AxCrypt-encrypted files start with.
So, it would seem that the file you attempt to upgrade is not actually an AxCrypt-encrypted file (or a severely damaged one).
If you do not disable the option to auto-upgrade, all V1 files you open will be converted to V2 as they are opened.