Added security file

SECURITY.md

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+# Security Policy
+
+This document should guide you about understanding the security concept behind
+Pi and also where the boundaries are.
+
+In general Pi is a coding agent that runs locally within the security boundary
+of the user that is running it.  It's the responsibiltiy of the user to monitor
+its operations or to contain it within a container, virtual machine or other
+Sandbox solution.
+
+Pi relies on users installing trustworthy extensions and loading trustworthy
+skills and only to use pi within trusted repositories.  This is because files
+like `AGENTS.md` or instructions in comments can be used to prompt inject the
+coding agent trivially and this cannot be protected against.
+
+## Reporting a Vulnerability
+
+If you believe you found a security vulnerability in pi or another package in
+this repository, please report it privately by either:
+
+- Emailing `security@earendil.com`, or
+- Opening a private report through GitHub Security Advisories for this repository
+
+Please include:
+
+- A description of the issue and its impact
+- Steps to reproduce, proof of concept, or relevant logs
+- Affected package, version, commit, or configuration
+- Any known mitigations
+
+Do not open a public issue for security-sensitive reports.  We will review
+reports and coordinate disclosure as appropriate.
+
+## Scope
+
+Security issues in the distributed packages, command-line tools, APIs, and
+repository code are in scope as well as earendil operated infrastricture
+on `pi.dev`.
+
+## Out Of Scope
+
+- Local code execution or sandboxing behavior (the Pi coding agent intentionally does not have a sandbox)
+- Behavior of pi extensions or skills installed by the user
+- Risks from working in untrusted repositories
+- Risks from installing untrusted extensions, skills, packages, or tools
+- Isuses caused by non trustworthy MITM proxies
+- Public internet exposure of a Pi installation
+- Prompt injection attacks
+- Exposed secrets that are third-party/user-controlled credentials
+- Reports requiring write access to trusted local state/config (`~/.pi`, workspace
+  files, `AGENTS.md`, skills/extensions config), unless they show how an attacker
+  gets that write access.
+- Issues caused by intentionally weakened user configuration.
+- Resource/DOS claims that require trusted local input/config against the pi coding agent.
+- Reports about malicious model output.
+- User-approved or user-initiated local actions presented as vulnerabilities.
+
+## Notes for Reporters
+
+The most useful reports show a current, reproducible security boundary bypass
+with demonstrated impact.  Reports that only show expected local-agent behavior,
+prompt injection, or a malicious trusted extension/skill are not security
+vulnerabilities under this model.
+
+When possible, include the exact affected path, package version or commit SHA,
+configuration, and a proof of concept against the latest release or latest
+`main`.  For dependency reports, include evidence that the shipped dependency is
+affected and that the issue is reachable through Pi.  For exposed-secret reports,
+include evidence that the credential is owned by Earendil or grants access to
+Earendil-operated infrastructure or services.