Sorry if I got wooshed.
It's currently unsolved, but I don't think that it's been proved to be unsolvable as surely that would prove P ≠ NP. The connection to encryption is that integer factorisation could then be solved in polynomial time which would break current systems, though in theory a much longer key length could be used to try to outpace computer power, especially if the polynomial algorithm is hugely inefficient.
Edit: I see that the halting problem has indeed been proved to be unsolvable and it doesn't imply P ≠ NP