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What prevents bad actors from buying a popular extension and rolling out malicious code to everyone who uses the extension?

I mean except the integrity of extension developers.

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This is happening repeatedly. Each extension can possibly go bad at any time if the dev decides to cash out.

That's weird, I think this story is the second one ever that I read on this topic, so I assumed it's rare.

Nothing. I own a few extensions with users in the tens of thousands and receive so many emails from people/business trying to buy out the extensions for "monetization".

This is a huge issue and Google is doing absolutely nothing to address it.

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