Estonian driver Vips was heard using racist language during a gaming stream on Twitch last week, prompting widespread condemnation on social media.
Red Bull initially suspended him as its test and reserve driver to conduct a full investigation, before dropping him altogether on Tuesday, stressing that the team “do not condone any form of racism”.
However, Vips will continue to drive for Hitech for the rest of the F2 season, where he currently sits seventh in the championship with three podiums and two pole positions in the opening six rounds.
In a statement, Hitech boss Oliver Oakes said that while the outfit “debated” whether it should retain Vips in F2, it felt that it should offer the 21-year-old a chance to redeem himself.
“I have made the decision for Juri to keep his F2 seat with Hitech for the remainder of the season, a decision we have seriously debated. Allowing him to complete his season with Hitech is an opportunity for him to demonstrate, through his actions, the type of person he is," said Oakes.
“I have made it clear that I think the language used was totally unacceptable, but I choose to give him the chance to redeem himself.”
F2 expressed surprise after Hitech elected to retain Vips, stating that it was a decision the championship would not have taken had it been in charge of the team.
“Following the recent incident involving Juri Vips, F2 would like to reaffirm that the use of racist or discriminatory language cannot be tolerated in any environment,” read the statement.
"Hitech Grand Prix’s decision today is surprising and not one we would have taken. We will monitor the situation carefully with them to ensure that such behaviour is properly addressed.”
Oakes added in his statement that Hitech does not condone Vips' behaviour, but was satisfied that his removal from Red Bull was a "decidedly severe punishment".
"Hitech GP employs an inclusive work force and has never condoned racism or offensive behaviour in any forms. That said, if we live in a society where no one can make a mistake, then genuinely apologise, have the chance for redemption and learn from it - what does it say about society?
"I don’t know why he said what he said. I don’t know why he was playing and streaming COD [Call of Duty] at that time of day. Certainly, there are things that would have been far more beneficial for his career!
"What I do know is that having his contract terminated by Red Bull as a result of his actions is a crushing experience for him, a deservedly severe punishment. The reality is there will not be unanimous agreement whether that punishment is sufficient, and that is totally understandable."