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CISO Briefing: Malicious VS Code Extensions on Open VSX Are Stealing Developer Tokens. Check Your System Now. — by CyberDudeBivash

By CyberDudeBivash · 01 Nov 2025 · cyberdudebivash.com · Intel on cyberbivash.blogspot.com

LinkedIn: ThreatWirecryptobivash.code.blog

VS CODE • OPEN VSX • SUPPLY CHAIN ATTACK • EDR BYPASS

Situation: A new software supply chain attack is targeting your developers. APTs (Advanced Persistent Threats) are publishing *malicious* Visual Studio Code (VS Code) extensions to the Open VSX Marketplace, a popular repository for open-source builds like VSCodium. These “helpful” tools (e.g., formatters, themes) are infostealers designed to exfiltrate GitHub tokens, AWS keys, and SaaS session cookies.

This is a decision-grade CISO brief. This is a “Living off the Trusted Land” (LotL) attack that is *designed* to bypass your EDR (Endpoint Detection and Response). Your EDR is whitelisted to *trust* `vscode.exe`. It is *blind* when this trusted process, hijacked by a malicious extension, exfiltrates your “crown jewel” source code and cloud credentials.

TL;DR — Your developers are downloading Trojan Horse AI models.

• The “Shadow IT” Risk: Devs are using Open VSX (an unvetted marketplace) to get “cool” extensions, bypassing your security policy.
• The TTP: The malicious extension (`index.js`) runs *inside* the trusted `vscode.exe` process. It scrapes `.env` files, `~/.aws/credentials`, and browser cookies.
• The EDR Bypass: Your EDR sees a *trusted, signed* `vscode.exe` process making a “normal” HTTPS connection. It *cannot* see that this connection is exfiltrating your GitHub token.
• The Impact: IP Theft (source code), PII Breach, Corporate Espionage, and full Cloud Infrastructure Compromise via stolen AWS keys.
• THE ACTION: 1) AUDIT all installed extensions NOW. 2) HARDEN your policy (block Open VSX, create an “allowlist”). 3) HUNT for anomalous `vscode.exe` network traffic *immediately*.

Contents

1. Phase 1: The “Open VSX” Problem (Your New Supply Chain Attack Surface)
2. Phase 2: The Kill Chain (From “Helpful Tool” to IP Theft)
3. Phase 3: PostMortem – Why Your EDR & ZTNA Are 100% Blind
4. The CISO Mandate: The “Audit, Harden, Hunt” Plan
5. Tools We Recommend (Partner Links)
6. CyberDudeBivash Services & Apps
7. FAQ

Phase 1: The “Open VSX” Problem (Your New Supply Chain Attack Surface)

As a CISO, you have a Third-Party Risk Management (3PRM) program for your *vendors* (like SaaS apps). But do you have one for your *developer tools*?

Your developers are in an “AI arms race” to be productive. They are downloading “Coding Assistants,” “Productivity Timers,” and “Pretty Themes” for their VS Code IDE. While the *official Microsoft Marketplace* has some vetting, the Open VSX Registry is a community-driven alternative with *far less moderation*.

This is a Software Supply Chain Attack waiting to happen. An APT (like BRONZE BUTLER) “typosquats” a popular extension:

• Real Extension: `Pretty-Code-Formatter`
• Malicious Extension: `Pretty-Code-Formater` (note the missing ‘t’)

Your developer, moving fast, installs the malicious version. This is the new “Shadow IT.” The tool *is* the malware. The developer *invites* the Trojan Horse onto their machine, and your EDR *holds the door open* for it because the “horse” (`vscode.exe`) is on the “guest list.”

Phase 2: The Kill Chain (From “Helpful Tool” to IP Theft)

This is a CISO-level PostMortem because the kill chain is *devastatingly* fast and *invisible* to traditional tools.

Stage 1: Initial Access (The “Shadow IT” Install)

Your developer (`dev@yourcompany.com`) is working on “Project Titan.” They want a new theme. They install “Solar-Eclipse-Theme” from Open VSX, ignoring the prompt that it “needs to run code.”

Stage 2: Execution (The “EDR Bypass”)

The extension is now *part of* VS Code. It runs as a `node.js` script *inside* the trusted `vscode.exe` process.
This is the EDR Bypass. Your EDR (e.g., Kaspersky, CrowdStrike) sees a 100% *trusted* process: `vscode.exe`. It’s signed by Microsoft. It’s on the “allowlist.”

Stage 3: Collection & Exfiltration (The “Breach”)

The malicious `index.js` file in the extension now runs with the *full permissions* of your developer. It *immediately* scans for “crown jewels”:

• `fs.readFile(‘~/.aws/credentials’)`
• `fs.readFile(‘~/.ssh/id_rsa’)`
• `fs.readFile(‘…/project/prod.env’)`
• It also scrapes all *browser cookies* and *session tokens*.

It then makes an `HTTPS POST` request to an attacker’s C2 server. Your Firewall/DLP is blind. It sees a “normal” HTTPS connection from `vscode.exe` (a process that *routinely* connects to the internet for updates) and *allows it*.

The breach is complete. The attacker now has your developer’s GitHub token, their AWS keys, and their M365 session cookie. They can *log in as your developer* and steal your *entire* codebase.

Phase 3: PostMortem – Why Your EDR & ZTNA Are 100% Blind

This TTP is a kill-shot to “lazy” Zero-Trust architectures.

• Your EDR Failed: It’s configured to trust `vscode.exe`. This is a “Living off the Trusted Land” (LotL) attack. Your EDR cannot tell the difference between “good” `vscode.exe` (checking for updates) and “bad” `vscode.exe` (exfiltrating your `.env` file).
• Your ZTNA Failed: Your Zero-Trust policy *verified* the *developer*. It saw a “trusted” user (`dev@yourcompany.com`) on a “trusted” device (`dev-laptop-01`). It was *blind* to the *malicious C2 beacon* running *inside* that trusted user’s “trusted” VS Code process.

The CISO Mandate: You MUST have a 24/7 MDR.
An automated EDR is just a “noise generator.” You need a Managed Detection & Response (MDR) service. Our 24/7 CyberDudeBivash SecOps team is trained to hunt for *these specific TTPs*.

We don’t see “noise.” We see a “Priority 1 Incident.” Our hunt query is: “Why is `vscode.exe` on a dev’s laptop *spawning a shell*? Why is it *reading the aws/credentials file*? And why is it *making a new network connection* to an unknown IP?”

We see this, identify it as a C2 beacon, and initiate Incident Response in minutes.
Explore Our 24/7 MDR Service →

The CISO Mandate: The “Audit, Harden, Hunt” Plan

You cannot patch this. This is a *process* and *architecture* failure. This is your new 3-step mandate.

1. AUDIT (The “Immediate Fix”)

You must *assume* your developers are *already* using “Shadow AI” and malicious extensions.
ACTION: Force your developers to run `code –list-extensions > extensions.txt`. Your security team *must* manually audit this list. Google *every* publisher. If it’s not “Microsoft,” “Red Hat,” or another *known* mega-corp, it’s a high-risk liability.

2. HARDEN (The “Policy”)

You *must* stop this from happening again.

• Block Open VSX: Block `open-vsx.org` at your firewall. It is an *unvetted* repository.
• Create an “Allowlist”: Use GPO or your MDM to create a *corporate-approved* “allowlist” of VS Code extensions. Deny all others.
• Train Your Devs: Your developers *are* your new perimeter. They *must* be trained in Secure Coding and Supply Chain Risk.

Training is not optional. Your developers are creating these flaws. You *must* train them. We use Edureka’s “DevSecOps” and “Secure Coding” courses to train our clients’ dev teams.
Upskill Your Dev Team with Edureka (Partner Link) →

3. HUNT (The “MDR Mandate”)

You *must* assume you are breached. Your *only* defense is to find the “low-and-slow” C2 beacon.
This is the MDR Mandate. You *must* have a 24/7 human team hunting for the “TTP 2 / C2” behavior:
`vscode.exe` (or `python.exe`, `node.exe`) making *anomalous outbound network connections* from developer workstations.

Recommended by CyberDudeBivash (Partner Links)

You need a layered defense. Here’s our vetted stack for this specific threat.

Kaspersky EDR
This is your *sensor*. It’s the #1 tool for providing the behavioral telemetry (e.g., `vscode.exe -> powershell.exe`) that your *human* MDR team needs to hunt.Edureka — DevSecOps Training
Train your developers *now* on LLM Security and “Secure AI Development.” This is non-negotiable.TurboVPN
Your developers are remote. You *must* secure their connection to your internal network.

Alibaba Cloud (Private Repo)
The *real* solution. Host your *own* private, secure extension registry on Alibaba Cloud. Stop devs from downloading public, unvetted tools.AliExpress (Hardware Keys)
*Mandate* this for all developers. Protect their GitHub and cloud accounts with un-phishable FIDO2 keys.Rewardful
Run a bug bounty program. Pay white-hats to find flaws *before* APTs do.

CyberDudeBivash Services & Apps

We don’t just report on these threats. We hunt them. We are the “human-in-the-loop” that your automated EDR is missing.

• Managed Detection & Response (MDR): This is the *solution*. Our 24/7 SOC team becomes your Threat Hunters, watching your EDR logs for these *exact* “vscode.exe -> C2” TTPs.
• Adversary Simulation (Red Team): This is the *proof*. We will simulate this *exact* EDR bypass kill chain to show you where you are blind.
• Emergency Incident Response (IR): You found this TTP? Call us. Our 24/7 team will hunt the attacker and eradicate them.
• PhishRadar AI — Stops the phishing attacks that *initiate* other breaches.
• SessionShield — Protects your SaaS/GitHub sessions *after* the infostealer has stolen the cookie.

Explore 24/7 MDR ServicesBook an Adversary Simulation (Red Team)Subscribe to ThreatWire

FAQ

Q: What is Open VSX?
A: It’s an open-source, community-driven alternative to the official Microsoft VS Code Marketplace. It’s used by VSCodium (the 100% FOSS build of VS Code) and other IDEs. Its *open* nature means it is *less moderated* and a *higher risk*.

Q: My EDR has “AI.” Am I safe?
A: No. Not automatically. Your AI is only as good as its configuration. If it’s configured to “trust all signed Microsoft processes” (like `vscode.exe`), it will *miss this*. This attack is designed to *exploit* that trust. You *must* have a *human* MDR team hunting for the *behavioral* anomalies.

Q: How do I check *right now*?
A: On your (or your developer’s) machine, run `code –list-extensions`. *Audit every single one.* Google the publisher. If it’s not Microsoft, Atlassian, Red Hat, or another major trusted corp, *investigate it*.

Q: What’s the #1 action to take *today*?
A: Policy. Block `open-vsx.org` at your firewall *today*. Send a bulletin to your dev team *today* to *only* use the official, vetted Microsoft marketplace. Then, call our team to run an Adversary Simulation to see who *didn’t* follow the policy.

Next Reads

• [Related Post: The “Session Hijacking” TTP Your ZTNA is Missing]
• Daily CVEs & Threat Intel — CyberBivash
• CyberDudeBivash Apps & Services Hub

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#VSCode #OpenVSX #SupplyChainAttack #DevSecOps #EDRBypass #RedTeam #MDR #CyberDudeBivash #Infostealer #TokenTheft #Github #AWS