VS Code extensions contain trojan-laden fake image
Source AlienVault OTX General
Description
A malicious campaign has compromised 19 Visual Studio Code extensions by embedding malware within dependency folders, specifically by modifying the legitimate npm package 'path-is-absolute'. Active since February 2025, the attackers disguise malicious binaries as PNG images within archives to evade detection. When VS Code starts, a JavaScript dropper decodes and executes two malicious binaries using living-off-the-land binaries, enabling stealthy execution. This attack leverages trusted components from the VS Code Marketplace, complicating detection and mitigation. Although no known exploits in the wild have been reported, the campaign demonstrates advanced evasion techniques and targets a widely used development environment. The malware involves a Rust-based trojan and employs multiple tactics such as code obfuscation, masquerading files, and abuse of legitimate binaries. European organizations using VS Code with affected extensions are at risk of compromise, data theft, or further lateral movement. Mitigation requires careful vetting of extensions, monitoring for suspicious activity, and restricting execution of untrusted binaries. Countries with strong software development sectors and high VS Code adoption are most likely to be impacted. Given the stealth, potential for privilege escalation, and broad impact, the threat severity is assessed as high.