ZCode, the desktop coding app from Z.ai, was found to silently package and upload a user’s entire workspace - including full .git history, LFS cache, reflogs and global configs - into an encrypted archive that is sent to Alibaba Cloud (Aliyun OSS). The client tars and AES-256-CTR encrypts the snapshot, then wraps the symmetric key with an RSA-OAEP public key delivered by the server; the matching private key lives only in Z.ai’s cloud, so users cannot decrypt their own ciphertext. In one reverse-engineered capture a 345 MB commercial workspace produced a 313 MB encrypted archive of 42,411 files (the .git directory comprised 86.6% of the payload). That object store contains deleted API keys, unpushed branch names, internal hostnames and years of repository lineage, not just the open files the developer was editing.
UI toggles do not prevent the behavior because a host-level capture sidecar is spawned unconditionally; “Optimize Experience” and “Repo Snapshot Indexing” only affect training consent and server indexing, not local packaging and upload. The snapshot/rollback functionality is embedded in the system prompt and the agent tool surface never exposes the upload pipeline. Community reaction was immediate and alarmed; ZCode is a closed harness around open GLM weights, complicating “local” trust. A reliable mitigation is making the ~/.zcode/v2/checkpoints directory kernel-immutable (chattr/chflags), which disables rollback but stops uploads. The incident highlights that the runtime/harness - not just model weights - must be audited for what it transmits and who can decrypt stored data.
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