Beware! New VS Code Malware Steals Passwords, Screenshots & More (Full Breakdown) (2026)

Imagine this: You’re a developer, looking to enhance your coding experience with a sleek dark theme and a handy AI assistant for your VS Code. Sounds harmless, right? But here’s where it gets alarming—what if those tools were actually malware in disguise, silently stealing your passwords, screenshots, and even hijacking your browser sessions? That’s exactly what happened to unsuspecting developers who downloaded malicious extensions from the Microsoft Marketplace.

Researchers at Koi, a cybersecurity firm, recently uncovered a disturbing trend: two seemingly legitimate extensions for Microsoft Visual Studio Code (VS Code) were anything but benign. These extensions, masquerading as a premium dark theme inspired by Bitcoin design and an AI coding assistant, were actually infostealing malware. Once installed, they delivered the Lightshot screenshot tool bundled with a malicious DLL file, Lightshot.dll, which harvested a treasure trove of sensitive data—clipboard contents, installed programs, running processes, desktop screenshots, WiFi credentials, and detailed system information.

And this is the part most people miss: The malware didn’t stop there. It also launched Google Chrome and Microsoft Edge in headless mode to steal browsing cookies, potentially allowing attackers to hijack user sessions. As Koi Security researchers starkly put it, ‘Your code. Your emails. Your Slack DMs. Whatever’s on your screen, they’re seeing it too.’ They further emphasized, ‘It also steals your WiFi passwords, reads your clipboard, and hijacks your browser sessions.’

What makes this particularly insidious is how the malware blended in. VS Code themes are typically JSON files that don’t require activation events or PowerShell scripts, making them an unlikely suspect. However, the malicious theme raised red flags because it executed on every VS Code action—a clear sign of overreach. Similarly, the AI assistant extension provided genuine functionality, allowing users to chat with ChatGPT or DeepSeek chatbots directly in VS Code, which made it seem credible. But buried within its code, just before the legitimate AI implementation, researchers found intertwined malicious code. Interestingly, the attacker left comments marking this section, suggesting they were actively maintaining the codebase to ensure the payload delivery mechanism wasn’t accidentally removed during updates.

The malicious extensions in question were:
- BigBlack.bitcoin-black
- BigBlack.codo-ai
- BigBlack.mrbigblacktheme

Microsoft acted swiftly, removing the malware from the Marketplace on December 5th and 8th. Fortunately, while the first two extensions had been downloaded, the BigBlack.mrbigblacktheme extension caused no real-world impact due to its quick removal, according to Koi researchers speaking with The Hacker News.

But here’s the controversial part: How did these extensions slip through Microsoft’s vetting process in the first place? And what does this say about the security of third-party extensions in widely used developer tools? Are we placing too much trust in marketplaces that promise safety but may not always deliver? These questions are worth debating. What’s your take? Let’s discuss in the comments—do you think more stringent checks are needed, or is this an inevitable risk in today’s digital ecosystem?

Beware! New VS Code Malware Steals Passwords, Screenshots & More (Full Breakdown) (2026)

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