Fintech company Vesttoo has shocked everyone after announcing it will lay off 75% of its employees following a fraud scandal, FinTech Global reports.

According to Reuters, the Israel-based company will not only make the cuts but also close some of its offices in Asia. The reason for this is a scandal involving a fake letter of credit used as collateral in a deal with an insurer.

The offices the company is expected to close are in Tokyo, Hong Kong and Seoul, but it will retain employees in Tel Aviv, New York, London, Dubai and Bermuda.

“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”, Vesttoo said in an emailed statement to Reuters.

Vesttoo is currently conducting an internal and external analysis of the events leading up to the first fraudulent credential report. The size of the fintech company was 200 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”, the company continued.

The scandal surrounding the fraud has changed and halted the company’s plans to raise about $200 million in late-stage funding that would have valued the firm at nearly $2 billion.

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