FinTech company Vesttoo has shockingly announced that it will be laying off 75% of its staff in wake of its fraud scandal.
The Israel-based organisation is making the cuts, which include closing some of its offices across Asia, following on from a scandal over a fraudulent letter of credit used as collateral in a transaction with an insurer, according to Reuters.
The company is expected to close its Tokyo, Hong Kong and Seoul offices following the statement, but will retain staff in Tel Aviv, New York, London, Dubai and Bermuda respectively.
Vesttoo said in an emailed statement to Reuters: “In order to solidify the foundation of the company and reassure the industry, leadership must return its focus to core services while reducing overall costs, including parting ways with some of our employees.
“These are painful, but important decisions that we must make at this time. Our focus remains on regaining our footing and emerging from this challenge stronger than before.”
Vesttoo, which formerly had around 200 employees, is now conducting an internal and external analysis of the events leading up to the first report of a fraudulent letter of credit.
The turmoil has also halted the organisation’s plans to raise around $200 million in a late stage funding round that would value the firm at near $2 billion.
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