Although it's only happened a handful of times, there have been a number of incidents where powdertoy.co.uk accounts have been compromised because of carelessness with the powder.def file.
This file contains some settings for Powder Toy, but it also contains your username and password, people making and uploading Modifications to the game tend to be careless and end up packaging this file with their username and password for anyone else to use.

This Announcement is directed toward those uploading mods, but is still applicable to anyone that decides to upload any Powder Toy files.

@Dadasas
The encryption system is not the issue, since passwords are usually fairly small, it's not difficult to bruteforce them. I may replace the current system with one that does not store the password locally in a future update to the Powder Toy.