I would suggest for a longterm fix, reinstall your server software, in the short term, add server.encryption 1 to you your server.cfg and it will issue that command every time your server restarts.

MrLiquid

In console try this server.encryption 1
then writecfg

Let me know how you go

Is there any other work around other than this that anyone has found?  THis only happens on new servers ive spun up, all of my older servers do not have this issue but are built the same. 

All I can say it that's weird. For example on some servers I wasn't getting the heal when type "heal 100" in the console while I was admin and on another server again being admin worked fine.

I've noticed that if the server is running on localhost, you can give items without any issues, but when the server is running on a dedicated or VPS server, it stops working.

Absolutely same problem. Auth level 2, no plugins to block anything, did server.encryption 1, still nothing. Any bright ideas?

cryptohog

Absolutely same problem. Auth level 2, no plugins to block anything, did server.encryption 1, still nothing. Any bright ideas?

server.encryption 1
writecfg​

if not works, check Config File!

This was from awhile ago, but I wanted to add my 2c... I find that if I have any strange goings on with Rust, if I log off, close down Steam, and reopen it, there's 99% of the time a Steam update needed. Hope this helps anyone finding themself in a bind.