Elon Musk Deepfake Scam Used To Promote Fraudulent Crypto Trading Platform, Hong Kong's Financial Regulator Warns

The Hong Kong Securities and Futures Commission (SFC) has issued a warning about a fraudulent cryptocurrency trading platform called "Quantum AI," which utilizes deepfakes of Elon Musk to lure victims.

This scam, though not new, underscores the growing use of artificial intelligence (AI) in committing fraud, particularly in Asia.

SFC Public Warning and Immediate Actions

On May 8, the SFC highlighted the deceptive nature of Quantum AI, which promises "too-good-to-be-true" returns, the South China Morning Post reported.

The regulator has requested the Hong Kong Police Force to block access to related websites and social media pages. As of this week, the associated domains were inaccessible, and the Facebook groups promoting the scam have been removed.

Rise of Deepfake-Related Fraud In Asia

Hong Kong has witnessed several deepfake-related fraud incidents, prompting government vigilance.

According to identity verification platform Sumsub, deepfake incidents in the Asia-Pacific region surged by 1,530% last year, with Vietnam and Japan experiencing the highest number of attacks.

Penny Chai, Sumsub's vice-president of business development in APAC, stated, "Thanks to increasing digital financial transactions in the emerging Asia market, there is a larger pool for deepfake targets. Since a high volume of instant cross-border transactions takes place in the region, especially in Hong Kong, deepfake scammers can leverage the complexity and volume of financial dealings to carry out fraudulent activities."

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History And Evolution Of The Quantum AI Scam

The Quantum AI scam has been around for at least a year, evolving with various iterations to target different groups.

One notable instance involved a deepfake video on Facebook featuring Musk and Jack Ma, co-founder of Alibaba Group Holding.

This video was debunked by PolitiFact and traced back to a 2019 World AI Conference in Shanghai where Musk and Ma appeared together.

Another variation involved modifying footage from Elon Musk’s appearance on the Fox News show hosted by Tucker Carlson, according to Reuters Fact Check.

Addressing The Growing Threat

The scam websites often use cheap hosting providers and flexible back-end technologies like WordPress.

A top search result for Quantum AI misleadingly advises users to deposit a minimum of $250, warning them to "invest only what you're okay with losing completely."

The alarming rise of AI-driven fraud, particularly through deepfakes, highlights the need for increased vigilance and regulatory measures in the digital financial landscape.

The evolving nature of such scams necessitates continuous monitoring and public awareness.

The implications of AI and digital fraud will be a key topic at Benzinga’s Future of Digital Assets event on Nov. 19.

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