diff --git a/crates/iam/src/store/object.rs b/crates/iam/src/store/object.rs
index bc50d5ea1..2cadfd71f 100644
--- a/crates/iam/src/store/object.rs
+++ b/crates/iam/src/store/object.rs
@@ -130,8 +130,14 @@ impl ObjectStore {
     }
 
     fn decrypt_data(data: &[u8]) -> Result<Vec<u8>> {
-        let de = rustfs_crypto::decrypt_data(get_global_action_cred().unwrap_or_default().secret_key.as_bytes(), data)?;
-        Ok(de)
+        let cred = get_global_action_cred().unwrap_or_default();
+        match rustfs_crypto::decrypt_data(cred.secret_key.as_bytes(), data) {
+            Ok(decrypted) => Ok(decrypted),
+            Err(_) => {
+                warn!("Failed to decrypt IAM config data, treating as unencrypted");
+                Ok(data.to_vec())
+            }
+        }
     }
 
     fn encrypt_data(data: &[u8]) -> Result<Vec<u8>> {