The Hong Kong Securities and Futures Commission (HKSFC) has issued a stern warning to the public regarding a deceptive crypto exchange platform employing AI-generated videos featuring Elon Musk to promote its trading services.

On May 8, the HKSFC cautioned citizens about Quantum AI, a Hong Kong-based entity falsely claiming direct ties to the SpaceX founder. The exchange purported Musk as the chief developer behind their product, utilizing deepfake videos and images of him across their websites and social media channels.

In addition to leveraging deepfake technology, the fraudulent platform was accused of disseminating "false and misleading information" via a news outlet to cultivate trust among potential users.

The HKSFC elaborated, stating that Quantum AI propagated claims on its "news" website, asserting that the Hong Kong public had been utilizing its technology for cryptocurrency trading, promising unrealistic returns.

Local reports indicate that the Hong Kong police have been instructed to take swift action against the deceptive platform. As part of this crackdown, all of Quantum AI’s online platforms and associated social media pages will be promptly removed.

This revelation underscores the increasing sophistication of crypto scams, with AI-generated videos becoming a prevalent tool in the arsenal of fraudsters. Elon Musk, renowned for his previous support of cryptocurrencies, particularly Dogecoin, has frequently been targeted by such malicious actors.

Recent incidents, including during the solar eclipse event on April 8, saw YouTube inundated with live streams featuring old SpaceX footage and deepfake depictions of Musk, aimed at enticing unsuspecting users to send cryptocurrencies with the promise of doubling their investments.

These deceptive tactics extend beyond Musk, as fraudsters have exploited the identities of various prominent figures within and outside the crypto sector. Ethereum co-founder Vitalik Buterin fell victim to such impersonation earlier this year.

Against this backdrop, Hong Kong authorities are advocating for a regulatory framework to oversee cryptocurrency service providers. The HKSFC has received applications from 23 exchanges and has mandated the cessation of operations for all other businesses in the region by the end of May 2024.