The present invention provides a technique, in a network storage system, for a key management module (KMM) managing security operations within the storage server using an authenticated storage module (ASM) such as a smart card of the storage server. The KMM may process encryption key information (key information) generated by an encryption engine of the storage server to associate a key with a storage object of the storage server. The processed key information may then be stored by the KMM to a key map of the ASM, for which the ASM performs security services prior to storing information to the key map. The KMM may then request key information stored in the key map from the ASM, and forward the key information to the encryption engine for performing cryptographic operations on data of the storage object.