Malicious VS Code Extensions Delivering Trojan Payloads via Impersonation and Encrypted Loaders

Security researchers reported malicious Visual Studio Code extensions being used as a software supply-chain vector to compromise developer workstations. One campaign impersonated a viral AI coding assistant (“ClawdBot”) via a fake extension (“ClawdBot Agent”) that appeared legitimate and even functioned as an AI assistant by integrating real APIs (e.g., OpenAI/Anthropic/Google), while silently dropping malware on Windows at VS Code startup. The observed payload delivery used camouflage filenames such as Lightshot.exe (and references to Lightshot.dll) and an Electron-style bundle name Code.exe, indicating an effort to blend into common developer tooling and evolve the dropper over time.

A separate finding described an Open VSX extension masquerading as a popular Angular Language Service for VS Code, which bundled legitimate dependencies (e.g., @angular/language-service and typescript) alongside a malicious loader that activates when users open HTML or TypeScript files (onLanguage:html, onLanguage:typescript). The loader decrypts an embedded payload using AES-256-CBC (Node.js crypto), with a hardcoded IV and a large hex-encoded ciphertext, then delays and executes the decrypted code—behavior consistent with staged malware delivery and potential worm-like propagation through widely installed editor extensions.