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But extension gives snax permission to data a user copy pastes.
Give me a specific answer as to what this permission does

This is necessary to export the private key from browser extension.

what if a user is copying a Bitcoin address or something else to paste on some other site, you can read that too?

You can check out all extension code on github and see what it can read.

I dont understand code. Id be happy if you can let me know or someone else who can help.

Thank you