I believe the k7 version is the one specifically designed for No Payload Encryption (NPE). Typically this is for use in countries that are subject to export control from the US.
If such an image / device was mistakenly ordered with this version, it would have to be changed to a k8 image via software replacement. And then the free 3DES-AES license would need to be added to make it full K9-capable with all encryption options available.
You should contact Cisco to get the entitlement updated for this unit if you believe it to be eligible..