CaaStle, a startup originally founded in 2011 as a plus-sized clothing subscription service, is facing severe financial distress. The company confirmed that it has furloughed all employees and is nearly out of funds.

Former CEO Christine Hunsicker has resigned, and law enforcement is investigating allegations of financial misconduct, including misleading investors and using allegedly falsified audit opinions.

The board expressed disappointment and stated that their focus is on addressing challenges, supporting employees, and preserving the company’s technology and operations.

CaaStle has raised over US$530 million in funding, with its last round in 2019 totaling US$43 million.

Axios and Puck reported that Hunsicker was still fundraising days before stepping down, claiming financial stability.

If the allegations lead to a fraud case, it could be one of the biggest in the startup world, surpassing the US$175 million fraud involving Frank’s founder, Charlie Javice.