It’s open source software. It’s definitely possible to skip the encryption and even to tune the RS settings and craft pieces in such a way that in tact files end up on nodes. That said, that takes specific effort from the customer in order to do that. This may be more of a security concern than a legal one.
The problem is that these regulations don’t have exceptions for encrypted data.
I know Storjlabs has lawyers looking into this stuff and I sent in this question originally back in November. Perhaps they have thought it over since then.