diff --git a/packages/core/src/code_assist/oauth-credential-storage.test.ts b/packages/core/src/code_assist/oauth-credential-storage.test.ts
index 3ef2de997c..d08af00329 100644
--- a/packages/core/src/code_assist/oauth-credential-storage.test.ts
+++ b/packages/core/src/code_assist/oauth-credential-storage.test.ts
@@ -180,14 +180,18 @@ describe('OAuthCredentialStorage', () => {
       expect(result).toEqual(mockCredentials);
     });
 
-    it('should throw an error if the migration file contains invalid JSON', async () => {
+    it('should return null and log a warning if the migration file contains invalid JSON', async () => {
       vi.spyOn(mockHybridTokenStorage, 'getCredentials').mockResolvedValue(
         null,
       );
       vi.spyOn(fs, 'readFile').mockResolvedValue('invalid json');
 
-      await expect(OAuthCredentialStorage.loadCredentials()).rejects.toThrow(
-        'Failed to load OAuth credentials',
+      const result = await OAuthCredentialStorage.loadCredentials();
+
+      expect(result).toBeNull();
+      expect(coreEvents.emitFeedback).toHaveBeenCalledWith(
+        'warning',
+        expect.stringContaining('Corrupted OAuth credential file'),
       );
     });
 
diff --git a/packages/core/src/code_assist/oauth-credential-storage.ts b/packages/core/src/code_assist/oauth-credential-storage.ts
index c924031d0d..6da7e30957 100644
--- a/packages/core/src/code_assist/oauth-credential-storage.ts
+++ b/packages/core/src/code_assist/oauth-credential-storage.ts
@@ -129,8 +129,17 @@ export class OAuthCredentialStorage {
       throw error;
     }
 
-    // eslint-disable-next-line @typescript-eslint/no-unsafe-assignment
-    const credentials: Credentials = JSON.parse(credsJson);
+    let credentials: Credentials;
+    try {
+      // eslint-disable-next-line @typescript-eslint/no-unsafe-assignment
+      credentials = JSON.parse(credsJson);
+    } catch {
+      coreEvents.emitFeedback(
+        'warning',
+        `Corrupted OAuth credential file at ${oldFilePath}, skipping migration`,
+      );
+      return null;
+    }
 
     // Save to new storage
     await this.saveCredentials(credentials);