I do not think there is a formal convention. Your best bet is probably to inquire at the inventor, the one-man company tarsnap. Start at their webpage about scrypt.

Since the important point is cryptographic security and because of their unix-like naming (tarsnap!), I'd say this probably follows the same convention that makes ssh the secure shell. Hence my personal preference is to emphasize it as s(ecure) crypt(ographic grade hash), and hence favor the pronunciation s - crypt, but you see from the sheer amount of parenthesis I need to explain just how individualistic this interpretation may be.

EDIT: I am feeling somewhat dissatisfied by my own answer, and hence have sought other opinions, even at the risk of committing the sin of cross-posting. It seems to be a difficult question because the technical communities tend to declare language issues off-topic. I sympathize, myself often preferring the technical or logical content over issues of syntax, irrelevant semantic nuances, or indeed pronunciation. Yet on the English branch of Stackexchange at least the initial comments go in the direction that the technical community of all the people using scrypt as a word decides. This appears to be circular referencing. Hence I don't even know where we could have migrated the question to if we decide it is off-topic here.