The bug affects only users of IE with LastPass v2.0.20, and makes the passwords that LastPass automatically fills into the fields in IE also be stored in plaintext into the computer memory, which ultimately allows them to be extracted via a memory dump.
For the bug to be exploited, the user must be using IE and be logged into LastPass, and the attacker must be able to perform a memory dump in order to root through it in search for the unencrypted passwords - best done if he or she have direct access to the target's computer.
Another mitigating circumstance is that quitting IE deletes all the passwords from the memory.
Nevertheless, LastPass advises all users to update to the latest version, as it also patches other issues and contains a slew of new features.
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