Active Administrator 8.5 include changes to the Advanced Encryption Standard (AES) for better data security, thus it requires to decrypt and re-encrypt the existing database data when upgrading. The current passphrase must be provided to change or restore it and is very important to save it in a secure location.
If the Passphrase is lost or forgotten, unfortunately, it is impossible to decrypt the existing databases and this will not allow the upgrade procedure to continue. There is no workaround to this situation and the only solution will be creating a new Active Administrator Live and Archive databases with a new Passphrase of your choice.
To create a new passphrase with new databases, launch the "Configuration Manager" and select "No" when you are asked if you want to upgrade your existing live database and all archive databases, then follow the steps in the wizard to create new databases (with different names from the existing ones) instead of choosing the existing ones.