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In order to reboot my VPS, lxadmin requires me to type in my root password in clear text.

Is this a security oversight or am I missing something?

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Probably a known issue.

http://www.milw0rm.com/exploits/8880

Not a lot of point reporting it

http://www.itwire.com/content/view/25559/53/

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Is this a security oversight or am I missing something?

It looks like a security oversight to me. File a bug or complain. Since you are probably not rebooting very often you probably don't have to hit that page very often, so the risk seems minimal. On the other hand, that does make me wonder what other silly security related things they have done.

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