Encryption of LightSail Instances

According to the Lightsail FAQ, yes it does encrypt the data at rest and in motion.

What does Lightsail manage for me?

Lightsail manages a range of maintenance activities and security for your managed database and its underlying infrastructure. Lightsail automatically backs up your database and allows point in time restore from the past 7 days using the database restore tool, to help protect against data loss or component failure. Lightsail also automatically encrypts your data at rest and in motion for increased security and stores your database password for easy and secure connections to your database. On the maintenance side, Lightsail runs maintenance on your database during your set maintenance window. This maintenance include automatic upgrades to the latest minor database version and all management of the underlying infrastructure and operating system.

Does Lightsail block storage offer encryption?

Yes, to help keep your data secure, all Lightsail attached disks and disk snapshots are encrypted at rest by default, using keys that Lightsail manages on your behalf. Lightsail also provides encryption of data as it moves between Lightsail instances and attached disks.