Hong Kong SFC Warns Against Elon Musk Deepfake Crypto Scam

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The Hong Kong Securities and Futures Commission (SFC) has recently issued a warning regarding a scam involving deepfake videos of Elon Musk promoting a cryptocurrency trading platform known as “Quantum AI.” 

While the scam itself is not new, it underscores the alarming rise in the use of artificial intelligence (AI) to perpetrate fraud, with Asia emerging as a particularly vulnerable region.

Hong Kong SFC Warns Users

As per a report from SCMP dated May 17, In its public advisory on May 8, the SFC highlighted that Quantum AI promises unrealistic returns, prompting the regulator to request the Hong Kong Police Force to block access to associated websites and social media pages. 

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These domains have since been rendered inaccessible, and related Facebook groups have been removed.

Rise of Deepfake-Related Fraud Cases

Hong Kong has witnessed a surge in deepfake-related fraud cases, reflecting a broader trend in the Asia-Pacific region, where such incidents increased by 1,530 percent last year, with Vietnam and Japan being the hardest hit, according to identity verification platform Sumsub. 

Penny Chai, Sumsub’s vice-president of business development in the Asia-Pacific region, noted,

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“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.”

Deepfake Video of Musk and Ma

The Quantum AI scam has been circulating for at least a year, with various versions targeting different groups. One notable video, debunked by PolitiFact, featured Elon Musk and Jack Ma, co-founders of Alibaba Group Holding, promoting the platform. 

This video was manipulated from footage of Musk and Ma at the 2019 World AI Conference in Shanghai. Another instance involved a deepfake video of Musk on Tucker Carlson’s Fox News show, as confirmed by Reuters Fact Check.

Hong Kong Ranks Among Top 5 Markets in Asia for ID Fraud

The rise in deepfake fraud is significant; Sumsub reported a tenfold increase in such incidents last year. Hong Kong ranks among the top five markets in Asia for identity fraud, with a rate of 3.3 percent, trailing behind Bangladesh’s highest rate of 5.4 percent. 

In the first quarter of this year, fintech industry fraud in Hong Kong grew at a rate of 3.8 percent, a 216 percent increase compared to the same period last year, according to Sumsub. Deepfake scams have already caused substantial financial losses in Hong Kong.

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