23andMe, a direct-to-consumer genetic testing company, filed a Chapter 11 bankruptcy and requested the US Bankruptcy Court in the Eastern District of Missouri to assist in a sale to recover the value of its enterprise.
23andMe offers saliva-based DNA test products that enable customers to determine and monitor their genealogy. The business opened up in 2021 through a merger having a Special Purpose Acquisition Company (SPAC) and a $6 billion market capitalization. The company’s highest end-of-day stock price in February 2021 was $353.0. Since then, the share value has gone down to its lowest price of $1.27 at the beginning of March 2025. In 2023, 23andMe encountered a terrible data breach. Although the 23andMe systems were not accessed, a hacker gained access to accounts and stole the sensitive information of 7 million people, which is about 50% of its clients. 23andMe experienced serious criticism because of the data breach. Moreover, data protection government bodies in the U.K. and Canada started investigations. 23andMe faced several lawsuits associated with the breach and agreed to a $30 million settlement to take care of the combined class action lawsuit.
CEO and co-founder Anne Wojcicki of 23andMe has been seeking a buyout as of April 2024. However, the board turned down the suggestion. She resigned and will try to buy the company and make it a private company as she believes 23andMe remains a workable business. There is no assurance that Wojcicki can raise the required finances, and there might be other would-be buyers. In case another buyer acquires 23andMe, the genetic information of 15 million people will be included in the purchase. The data will include genetic, ancestry, and family relationships and any personal data given when creating the account.
According to CEO chair Mark Jensen, the company is committed to safeguarding customer information and that data privacy is an important factor in deciding any potential deal. Users of the 23andMe service in the U.S. are protected under the Genetic Information Nondiscrimination Act (GITA). It is not allowed to use the genetic information to make work or medical insurance decisions, although the data may be used in other ways.
California Attorney General Rob Bonta is reminding California locals that under the California Genetic Information Privacy Act, they can request 23andMe to erase their information and discard any genetic data kept by the company. Given 23andMe’s claimed financial problems, this is a recommended action that Californians should consider. It is also a supported recommendation from the point of view of HIPAA privacy laws.
Customers can log in to their 23andMe account and request data removal and discard of their genetic samples. This is available through the settings menu. 23andMe will send an email confirmation, and the customer must respond to confirm the request before deleting/destroying any data/samples. This action by 23andMe will be permanent, though, as per 23andMe’s privacy guideline, some information will be held on to by 23andMe for an undisclosed period to consider the company’s legal responsibilities.
The 23andMe bankruptcy is a serious concern because of the involvement of the genetic and personal health data of millions of its users. The data set includes highly sensitive, immutable biological information identifying individuals and their families. Government authorities, privacy watchdogs, and national security organizations should help to make sure that this dataset is not accessed by the wrong entities.
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