IHC Esports have been thrown into disarray following the reported arrest of three of the founders of a major partner, forcing the Mongolian esports organization to issue a statement.
The UB Post, an English-language newspaper in Mongolia, reported on February 3 that three of Ih Bit Global’s founders had been arrested at the beginning of the month following complaints from a series of customers who had purchased the company’s crypto token, called Inflation Hedging Coin (IHC).
Ih Bit Global CEO Gantig Bayarmagnai, COO Munkhjin Otgonbaatar, and chairman Erkhembayar Bayarsaikhan face “charges of misappropriating funds” from the IHC coin and “laundering the income earned by manipulating the market”, according to the article.
On its official website, IHC is described as “an alternative investment token positioned to increase its value by continuously burning itself following multiple burn protocols.” The token has tumbled as much as 97% since it began trading, according to Coinbase.
The UB Post spoke with representatives of a number of customers who have lost large sums of money. “The people who created the IHC coin often make stories on the Internet and build trust,” one representative is quoted as saying. “They said ‘It is a gold-backed coin that would not fall from its issued price. Take it even if it falls.’ I had money in my account so I took it every day. I believed in what Otgonbaatar Munkhjin was saying. 142 million MNT ($40,488) reduced to two million MNT ($570). There are probably thousands of victims like me.”
IHC Esports respond to reports
Ih Bit Global entered esports in December 2021 through a partnership with Mongolian esports organization ZEUS Esports, which rebranded to IHC Esports as part of the deal.
The news of the arrest of three of Ih Bit Global’s founders has raised questions about the future of IHC Esports, one of Mongolia’s most prominent esports organizations.
In a statement posted to Twitter on February 9, IHC Esports chairman Dave Lee expressed “deep regret over the dissemination of misleading information”. There was not a single reference to Ih Bit Global, its founders, or the scandal involving the IHC token.
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“We would like to categorically state that certain individuals have no involvement with our management and operation, and we deny these allegations in the strong possible terms,” Mr. Lee said.
“The spread of misleading information has not only affected our team’s morale but also threatened the stability of our operations. We would like to assure all stakeholders that we are fully committed to safeguarding the integrity of our organization and protecting the interests of all parties involved.”
IHC Esports have risen in prominence in the last year, in part thanks to the international success of their CS:GO team, which was known as Checkmate prior to signing with IHC in March 2022. Mr. Otgonbaatar, one of Ih Bit Global’s founders, was IHC’s Chief Financial Officer at the time, according to an article from CSGO2ASIA.
Earlier this month, IHC’s CS:GO team finished 9th-12th at IEM Katowice after defeating paiN, FURIA and Cloud9, before falling to FaZe. They are currently 21st in HLTV.org’s world rankings.
The Mongolian team have become a regular at international CS:GO events, attending the two most recent Majors, PGL Major Antwerp and IEM Rio. IHC couldn’t go beyond the Challengers Stage at either event.
In January, IHC Esports’ PUBG Mobile team placed fifth at the PUBG Mobile Global Championship 2022, held in Malaysia and Indonesia. It was the team’s second-best international outing after finishing third at the 2020 PUBG Mobile Global Championship while still playing under ZEUS Esports.
In addition to IHC, the Mongolian organization is partnered with betting company 1xBet, cryptocurrency exchange X-META, and sports manufacturer Puma.