Musicrypt Announces U.S. Launch With State-of-the-Art Music Distribution System

Leading Digital Distribution Company Aggressively Enters Music Space After Successful Year in Canada

TORONTO -- 01/10/2005 -- Musicrypt Inc. (TSX-V: MCT) (OTC BB: MCYPF), the industry’s leading enabler of user-friendly and secure music distribution today announced, it will enter the United States Music Industry in early 2005, partnered with Billboard Radio Monitor, following an extremely successful year in Canada. Musicrypt’s Digital Media Distribution System (DMDS) is the premier digital music distribution system in the industry. DMDS is currently used by over 85% of the Canadian music industry, which includes leading record labels such as Sony/BMG Music, EMI Music, Universal Music and Warner Music. Major Canadian broadcast chains representing 100% of all chart-monitored radio stations now use DMDS, including Canada’s three largest broadcasters, Corus Radio, Standard Radio and Rogers Media Broadcasting on an exclusive basis.

Musicrypt’s DMDS is an easy-to-use web-based system that requires no expensive software or hardware. Musicrypt delivers music simultaneously nationwide and is available 24X7. Its advanced technology allows record labels, and broadcasters to control the delivery and receipt of their music.

“Musicrypt’s DMDS has dramatically increased the speed of delivery for Sony/BMG’s new music, internally and to the trade. Our promotion, marketing and sales staff now work with portable digital devices rather than bulky CD libraries,” said Norman Miller, VP Digital Business, IS&T and Marketing Services for Sony/BMG Canada, Inc. “We expect to eliminate the distribution of advance music on CD altogether in 2005 to fully benefit from the added security that the DMDS model provides.”

With the music industry accounting for over 30 billion dollars today, Musicrypt has gone to great lengths to develop technology to deliver the highest possible broadcast quality music to its customers. Musicrypt has securely delivered over a quarter of a million deliveries to date with today’s hottest music chart toppers such as Shania Twain, Britney Spears, U2, 3 Doors Down, Avril Lavigne, Alicia Keys, Depeche Mode, Jennifer Lopez, Christina Aguilera, Coldplay, Dido, Evanescence, Green Day, Gwen Stefani, Hoobastank, Jet, Jimmy Eat World, Maroon 5, N.E.R.D., R. Kelly, Seal, SUM 41, Sting, The White Stripes, Tim McGraw, Usher and hundreds of others.

“Based on the high demand for more advanced digital distribution in the music industry, we are looking forward to launching into the U.S. market early this year,” stated Cliff Hunt, Chairman and co-founder of Musicrypt. “The music industry is constantly evolving and growing, and our DMDS is changing the way record labels and broadcasters deliver quality music files securely and inexpensively. Based on the great successes we have had in Canada this past year, we are looking forward to launching our DMDS technology world-wide.”

About Musicrypt:

Musicrypt’s patent pending Digital Media Distribution System (DMDS) is the leading secure B2B digital delivery solution for the music industry. DMDS is a web-based delivery system that pioneers secure digital file distribution by incorporating biometrics, high-value encryption and watermarking. The first application of DMDS replaces the physical distribution of new musical recordings by record companies from the studio, internally, and to radio stations with more secure, more effective and less costly digital distribution of broadcast quality media via the Internet. Musicrypt trades on the TSX Venture Exchange (TSX-V) under the symbol MCT and in the U.S. under OTC BB: MCYPF. For more information on Musicrypt, please visit http://www.musicrypt.com

The statements contained in this release that are not purely historical are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

Sarah Miller

U.S. PR Contact for Musicrypt

Axis Marketing & PR

Contact via E-mail