Either by mistake, misfortune, or an attempted misdeed, an anonymous Litecoin user paid a $17,500 fee on a Litecoin transaction that was worth under $1000. The transaction took place on Thursday, May 23rd, and was mined by the China-based  Mining Pool  Mining Pool A mining pool is a group of cryptocurrency miners that look to combine their hash power and computing potential to increase the chance that they will earn mining rewards. Crypto miners are presented with choices, either working with others and splitting a higher probability reward among pool members, or going solo with a decreased chance for a bigger reward.With cryptos such as Bitcoin for example, it is simply not plausible for a normal person operating with their own computer to make a profit mining. Many newer miners opt for altcoins instead, as this is much more feasible given hashing requirements.Of note, a mining pool can never exceed 51% of the overall hashing power of any network, as this would present other issues entirely. Who Uses Mining Pools?Mining pools are an ideal solution for cryptocurrency miners who may not have access to large amounts of expensive equipment. Mining crypto takes a huge amount of computing power and electricity, with hardware and other fixed costs becoming a prohibitory factor for most. And yet, without a huge amount of hash power, it is unlikely that a miner will be chosen by a cryptocurrency network to confirm a block of transaction data. Therefore, it is also unlikely that the miner will earn any mining rewards. This changes if a miner joins a mining pool. A network is more likely to choose the pool to confirm transaction data because the pool has a higher amount of hash power. Mining rewards are distributed throughout the mining pool in accordance with the amount of hash power that each member contributes to the pool. A mining pool is a group of cryptocurrency miners that look to combine their hash power and computing potential to increase the chance that they will earn mining rewards. Crypto miners are presented with choices, either working with others and splitting a higher probability reward among pool members, or going solo with a decreased chance for a bigger reward.With cryptos such as Bitcoin for example, it is simply not plausible for a normal person operating with their own computer to make a profit mining. Many newer miners opt for altcoins instead, as this is much more feasible given hashing requirements.Of note, a mining pool can never exceed 51% of the overall hashing power of any network, as this would present other issues entirely. Who Uses Mining Pools?Mining pools are an ideal solution for cryptocurrency miners who may not have access to large amounts of expensive equipment. Mining crypto takes a huge amount of computing power and electricity, with hardware and other fixed costs becoming a prohibitory factor for most. And yet, without a huge amount of hash power, it is unlikely that a miner will be chosen by a cryptocurrency network to confirm a block of transaction data. Therefore, it is also unlikely that the miner will earn any mining rewards. This changes if a miner joins a mining pool. A network is more likely to choose the pool to confirm transaction data because the pool has a higher amount of hash power. Mining rewards are distributed throughout the mining pool in accordance with the amount of hash power that each member contributes to the pool. Read this Term LTC.top in block 1636831.

The fee was so massive that it caused the average transaction fee on the Litecoin network to jump from $0.05 to $0.70. Transaction fees haven’t been that high since Litecoin was worth $400 a pop at the end of December 2017.

Cryptoglobe theorized that the address that sent the transaction most likely belongs to a crypto business due to its high balance (322.6 LTC and) and high transaction volume (more than 2500 transactions since the address’ creation last year.)

A Clever Method of  Money Laundering  Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.Money Laundering ExplainedThe act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime. These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.One of the primary criticisms against cryptocurrencies has been their propensity for money laundering. Their anonymous nature and unregulated network structure make them ideally suited for money launders. Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laundered through financial institutions each year.This is not entirely surprising given the structure of the financial services industry and the nature of products and services offered by its participants.An ecosystem that involves the management, control, and processing of finances is inherently vulnerable to abuse by money launderers.Money Laundering ExplainedThe act of laundering is committed in circumstances in which an individual or entity is engaged in an arrangement that involves the proceeds of crime. These arrangements include a wide range of business relationships, i.e. banking, fiduciary and investment management.However, the degree of knowledge or suspicion will depend upon the specific offense but will usually be present where the person providing the arrangement, service or product knows, suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime. In some cases, the offence may also be committed where a person knows or suspects that the person with whom he or she is dealing is engaged in or has benefited from criminal conduct.One of the primary criticisms against cryptocurrencies has been their propensity for money laundering. Their anonymous nature and unregulated network structure make them ideally suited for money launders. Read this Term?

A number of theories have spawned on social media as to what could have led the wallet to pay such a ridiculously high fee.

The simplest explanation is just human error--someone set the fee too high and paid it before noticing.

However, other members of the crypto community have speculated that the high transaction fee could be an attempt at money laundering or “washing” coins (exchanging coins associated with nefarious activity.)

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”You Can Put Mining Rewards on Your Tax Sheet”

“Mining rewards are clean money. It's a legal industry making a profit,” wrote Reddit user LucySeesDiamonds. “You can put mining rewards on your tax sheet. And if anyone was tracing the dirty BTC's, you could always deny that they were yours because you simply got your rewards.”

“If I cleaned my LTCs this way, I could say I lost my old coins and bought new ones OTC from miners,” the user continued. “Then I can sell them immediately without taxes because I haven't made any profits with those ‘new’ coins.”

Another Reddit user explained that this is possible because miners get to select which transactions they want to process. “Usually you broadcast [a transaction] to the whole network (to as many miners as possible) to maximize the chance of it being included in the next block,” the user wrote.

“Miners can also choose which transactions they will include. If they wanted to, they could mine a block with only a few of their own transactions, but then they'd lose out on fees.”

The reasons for this could have been associated with tax evasion--however, others have pointed out that the high fee could be an attempt to disassociate coins with crimes they may have been used to pay for.

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There don't seem to be any other reports of outrageously high fees on low-level LTC transactions. However, if a trend starts to form, the money laundering theory could be more plausible.

Finance Magnates interviewed Litecoin creator Charlie Lee last year. To hear that interview, click here.