Four months ago, BitForex was just one of many obscure exchanges offering users the ability to trade cryptocurrencies like Bitcoin.

Today, the Singapore-based platform is regularly reporting daily transactions that exceed $5 billion -- nearly matching turnover on London’s 217-year-old stock exchange.

How did BitForex -- and other startups like it -- expand so quickly despite tumbling digital-asset prices and slowing activity on more established venues?

Many market participants say they suspect these fast-growing exchanges are either offering incentives that encourage users to inflate volumes, or not doing enough to stop abuse on their platforms. One red flag at BitForex: Its reported volume is by far the biggest among 219 platforms tracked by CoinMarketCap.com, despite traffic on its website amounts to a tiny fraction of most peers.

For individual investors lured to exchanges with inflated volumes, the risk is that cashing out at prevailing market rates may prove much harder than the reported figures suggest. Doubts about the integrity of crypto markets have deterred some professional money managers from investing in virtual currencies and prompted regulators to take a closer look at exchanges, even as some venues go to great lengths to avoid manipulation.

“Some exchanges will say ‘everyone’s doing it, so I’m doing it,’” said Neil Woodfine, a former crypto exchange executive who now runs Clavestone, a Bitcoin key management service. “New traders will get feedback very quickly from engaging with the market on trades not executing at the price they want.”

Trading has surged on BitForex because of the exchange’s so-called transaction mining system, Garrett Jin, vice president at BitForex, said in an emailed response to questions.

Transaction mining, also known as trade mining, is a controversial practice. On BitForex, users earn the equivalent of $1.20 in digital tokens issued by the exchange for every $1 they pay in transaction fees. It’s a system that critics say is tailor-made to encourage wash trading -- in which a trader, or a team of traders, buy and sell the same asset repeatedly to inflate market activity.

Read more: Crypto’s 80% Plunge Is Now Worse Than Stocks’ Dot-Com Crash

If the coins distributed by BitForex retain their value, customers can effectively earn free money by using automated programs, known as “bots,” to swap cryptocurrencies back and forth between accounts under their control. (Not all trade-mining exchanges offer rebates that exceed the value of trading fees paid by customers.)

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