Tested successfully on focal victoria using 1:11.0.0-0ubuntu1~cloud1 . I created an encrypted volume and attached it to a VM.

cinder type-create LUKS
cinder encryption-type-create --cipher aes-xts-plain64 --key_size 512 --control_location front-end LUKS nova.volume.encryptors.luks.LuksEncryptor
cinder create --volume-type LUKS --poll --name testvol 1
openstack keypair show guests || openstack keypair create --public-key ~/.ssh/id_rsa_guests.pub guests
openstack flavor create --id 8 --ram 1024 --disk 8 --vcpus 1 --public m1.ly
openstack server create --image bionic --flavor m1.ly --network private --key-name guests --wait test3
openstack floating ip create ext_net
openstack server add floating ip test3 172.20.0.235
openstack server add volume --device /dev/vdb test3 testvol

cinder list
WARNING:cinderclient.shell:API version 3.64 requested, 
WARNING:cinderclient.shell:downgrading to 3.62 based on server support.
+--------------------------------------+--------+---------+------+-------------+----------+--------------------------------------+
| ID                                   | Status | Name    | Size | Volume Type | Bootable | Attached to                          |
+--------------------------------------+--------+---------+------+-------------+----------+--------------------------------------+
| 7ea1296e-a478-4aea-ade0-49f00034b58b | in-use | testvol | 1    | LUKS        | false    | e1b2c025-0ede-4330-9129-80f6c281ac4d |
+--------------------------------------+--------+---------+------+-------------+----------+--------------------------------------+

cinder show 7ea1296e-a478-4aea-ade0-49f00034b58b
WARNING:cinderclient.shell:API version 3.64 requested, 
WARNING:cinderclient.shell:downgrading to 3.62 based on server support.
+--------------------------------+------------------------------------------+
| Property                       | Value                                    |
+--------------------------------+------------------------------------------+
| attached_servers               | ['e1b2c025-0ede-4330-9129-80f6c281ac4d'] |
| attachment_ids                 | ['c4410464-ff27-4234-9f5f-c5a7b094463b'] |
| availability_zone              | nova                                     |
| bootable                       | false                                    |
| cluster_name                   | None                                     |
| consistencygroup_id            | None                                     |
| created_at                     | 2021-11-02T11:23:28.000000               |
| description                    | None                                     |
| encrypted                      | True                                     |
| group_id                       | None                                     |
| id                             | 7ea1296e-a478-4aea-ade0-49f00034b58b     |
| metadata                       |                                          |
| migration_status               | None                                     |
| multiattach                    | False                                    |
| name                           | testvol                                  |
| os-vol-host-attr:host          | juju-4766ac-zaza-f0e92451c718-11@LVM#LVM |
| os-vol-mig-status-attr:migstat | None                                     |
| os-vol-mig-status-attr:name_id | None                                     |
| os-vol-tenant-attr:tenant_id   | 92c507c64e5b47d886e68b0a874499e6         |
| provider_id                    | None                                     |
| replication_status             | None                                     |
| service_uuid                   | 4e51ffb9-c259-4647-9a9a-d0adb19d0f6d     |
| shared_targets                 | False                                    |
| size                           | 1                                        |
| snapshot_id                    | None                                     |
| source_volid                   | None                                     |
| status                         | in-use                                   |
| updated_at                     | 2021-11-02T11:40:16.000000               |
| user_id                        | 0f41207ddcfd4bd5ab8ac694c772b709         |
| volume_type                    | LUKS                                     |
+--------------------------------+------------------------------------------+