TL;DR: A tampered Claude Code VS Code extension was distributed through Cursor's extension marketplace, so anyone who installed it there should verify their version.
The Catalyst
Cursor found a modified build of the Claude Code VS Code extension in its extension marketplace that Anthropic did not develop, affecting at most 5,000 users. Cursor took the marketplace down, said the malware was neutralized, reinstated it, and asks affected customers to update to Claude Code for VS Code version 2.1.314.
The Blast Radius
Installs that came from Cursor's marketplace rather than Anthropic's own distribution channel are the exposed set; extensions pulled elsewhere are stated as unaffected. Check the installed Claude Code for VS Code version and follow the linked post to locate the malicious package before updating to 2.1.314.
Source: x_com