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Volume Shadow Copy error on VeraCrypt/TrueCrypt volumes

VeraCrypt is an open-source disk encryption utility based on the discontinued TrueCrypt project. The software can create a virtual encrypted disk that works just like a regular disk. However, shadow copy creation will fail on VeraCrypt volumes. This is a known limitation, VeraCrypt's documentation states:

The Windows Volume Shadow Copy Service is currently supported only for partitions within the key scope of system encryption (e.g. a system partition encrypted by VeraCrypt, or a non- system partition located on a system drive encrypted by VeraCrypt, mounted when the encrypted operating system is running). Note: For other types of volumes, the Volume Shadow Copy Service is not supported because the documentation for the necessary API is not available.

VeraCrypt Known Issues & Limitations