May 13, 2024
By Sharan Kaur Phillora
Hong Kong’s Securities and Futures Commission (HKSFC) has recently alerted the public to a deceptive cryptocurrency exchange that leverages artificial intelligence to create videos and images of Elon Musk endorsing their services.
Here’s what we know:
The scam, involving the locally based Quantum AI, purported to have direct ties with the SpaceX founder, branding him as the leading developer of their cryptocurrency trading platform.
On May 8, the HKSFC issued a stark warning, detailing how Quantum AI utilized deepfake technology to spread false endorsements via their websites and social media platforms.
The fraudulent entity also exploited a fabricated news outlet to disseminate misleading information about its operations, claiming to offer implausibly high returns on cryptocurrency investments.
Local media reports indicate that Hong Kong authorities are ramping up efforts to dismantle Quantum AI’s online presence. Actions include shutting down the platform’s website and its related social media accounts. This crackdown underscores the increasing use of AI-generated content in cryptocurrency scams, with figures like Musk—who is a well-known cryptocurrency advocate—frequently being impersonated to lend credibility to such schemes.
This incident is part of a larger trend where scammers employ deepfake technology and the identities of high-profile tech figures to orchestrate crypto scams. For instance, during the April 8 solar eclipse, numerous YouTube channels broadcasted live streams featuring old SpaceX footage and deepfake representations of Musk, enticing viewers to send cryptocurrencies with promises of doubling their investments.
In response to these fraudulent activities and as part of broader regulatory measures, Hong Kong is moving towards a more regulated cryptocurrency environment. The HKSFC is in the process of implementing a licensing regime for crypto service providers, with 23 exchanges having already submitted applications. All other crypto businesses have been instructed to halt operations by the end of May 2024, as part of the new regulatory framework aimed at safeguarding investors and clamping down on crypto-related fraud.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.
