Elon Musk deepfake crypto scam raises concerns in Hong Kong

The Hong Kong Securities and Futures Commission (SFC) recently warned about a scam involving deepfake videos of Elon Musk promoting a cryptocurrency trading platform called ‘Quantum AI.’ The scam, which promises unrealistic returns, highlights the growing use of AI for fraudulent activities, particularly in Asia. The SFC has requested the Hong Kong Police to block access to the associated websites and social media pages, many of which are now inaccessible.

Deepfake-related fraud incidents have surged in the Asia-Pacific region, with a 1,530 percent increase last year, notably affecting Vietnam and Japan. Penny Chai, Sumsub’s vice president for business development in APAC, noted that the high volume of digital financial transactions in emerging Asian markets creates a fertile ground for such scams. Videos promoting Quantum AI, often featuring altered footage of Musk, have been debunked and traced back to old appearances of Musk at events like the 2019 World AI Conference.

Why does it matter?

The use of deepfakes in fraud has become more prevalent, with Hong Kong identified as a major target. The rate of identity fraud in Hong Kong was 3.3% last year, with significant financial losses reported. In one case, a Japanese bank manager was tricked into transferring $35 million due to a deepfake audio mimicking his director’s voice. The SFC has been vigilant in flagging suspicious virtual asset trading platforms, issuing numerous warnings this year alone, particularly after the significant JPEX cryptocurrency exchange fraud.

Additionally, the SFC warned about other risky crypto-related products, such as the LENA Network, which involves cryptocurrency staking, borrowing, and lending. The regulator emphasised that these arrangements might be unauthorised collective investment schemes and carry high risks.