Hong Kong Shuts Down AI-Enabled Crypto Scam Claiming Ties to Elon Musk

Earlier today, the Hong Kong Securities and Futures Commission (SFC) took decisive action against Quantum AI, an unlicensed cryptocurrency exchange that falsely claimed affiliation with Tesla CEO and Dogecoin ($DOGE) advocate Elon Musk. The fraudulent entity, based in Hong Kong, purported to offer AI-powered crypto trading services developed by Musk himself.

According to a report by Cointelegraph, in a brazen attempt to deceive potential investors, Quantum AI displayed AI-generated videos and images of Elon Musk on its website and social media profiles, suggesting a direct connection between the billionaire entrepreneur and the exchange’s trading technology. The SFC also suspected that Quantum AI had been spreading false and misleading information about itself through an undisclosed news website, promising “too-good-to-be-true” returns to lure unsuspecting crypto enthusiasts in Hong Kong.

The HKSFC swiftly responded to the fraudulent activities by issuing a warning against Quantum AI and directing the Hong Kong police to block the exchange’s website and remove all associated social media pages. This decisive move comes as part of Hong Kong’s ongoing efforts to regulate the cryptocurrency industry and protect investors from unscrupulous actors.

In an alert published on its website, the SFC had this warning about Quantum AI:

“The entity purports to provide cryptocurrency trading service with its underlying artificial intelligence (AI) technology. It operates at the above websites and is suspected of engaging in virtual asset related fraudulent activities. The entity is suspected of using AI-generated deepfake videos and photos of Mr Elon Musk on its website and through social media to deceive the public that Mr Musk is the developer of the entity’s underlying technology.

“The entity is also suspected of using a ‘news’ website to disseminate false and misleading information about itself and promote its cryptocurrency trading services to the Hong Kong public. It claims on the “news” website that the Hong Kong public has been using its technology to trade in cryptocurrencies and is able to earn “too-good-to-be-true” returns.“

Per Cointelegraph’s report, as of February, the HKSFC had received license applications from 23 crypto exchanges seeking to operate legally in Hong Kong. The regulator has since stopped accepting new applications and has instructed all unlicensed entities to cease operations by the end of May. This crackdown on unlicensed exchanges aims to create a more transparent and trustworthy environment for crypto investors in the region.

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