Please use the search feature of this site, there are several prior threads discussing security/encryption or the lack there of in certain instances of the My Cloud and its remote access connection. If your looking for WD to discuss their back end security methods for the My Cloud, its software or the MyCloud.com web portal you’ll probably be disappointed since companies tend to keep that information from the general public.
The My Cloud generally does not have hardware based encryption.
Here are a few threads one can find using the forum search feature:
http://community.wd.com/t/are-data-exchanges-ciphered/152977
http://community.wd.com/t/create-an-encrypted-folder/151624
And there is this post elsewhere:
http://versprite.com/og/command-injection-in-the-wd-my-cloud-nas/