23andMe Files for Bankruptcy, Plans Asset Sale Amid Privacy Concerns

California-based genetic testing firm 23andMe has filed for Chapter 11 bankruptcy and is preparing to sell off its assets after years of financial troubles. The company, once a pioneer in direct-to-consumer DNA testing, has struggled with declining revenue, legal battles, and security breaches that have shaken consumer trust.

23andMe’s Rise and Fall

23andMe launched in 2007 with a simple yet revolutionary concept: mail in a saliva sample and receive a personalized report detailing ancestry and genetic predispositions. Over the years, it sold more than 15 million DNA kits, becoming a household name in the genetic testing industry.

But financial headwinds proved too strong. The company faced declining consumer interest, regulatory scrutiny, and mounting legal troubles. On Sunday, 23andMe confirmed in a press release that its bankruptcy filing would not impact how it manages customer data, aiming to reassure users concerned about their genetic information.

Leadership Shake-Up and Asset Sale

On Monday, 23andMe filed documents with the U.S. Securities and Exchange Commission (SEC), revealing plans for a structured asset sale through a competitive auction. Notably, the company rejected a takeover bid from its own CEO and co-founder, Anne Wojcicki, who has since resigned to participate in the bidding process as an independent buyer.

“We are committed to safeguarding customer data and ensuring transparency in our management of user data moving forward,” said Mark Jensen, Chair of 23andMe’s Board of Directors. “Data privacy will remain a key factor in any transaction.”

With the sale now on the horizon, privacy advocates worry that sensitive genetic data could end up in the hands of entities with less stringent security practices, despite the company’s assurances.

Privacy Concerns and Official Warnings

The potential sale of 23andMe’s vast database has drawn concerns from consumer protection groups and government agencies alike.

• The California Attorney General’s office issued a consumer alert, advising customers to delete their data, destroy their test samples, and revoke research permissions to minimize risk.
• The United Kingdom’s Information Commissioner’s Office (ICO) emphasized that 23andMe remains obligated to uphold GDPR standards and protect customer data despite its financial turmoil.
• ICO Deputy Commissioner Stephen Bonner stated, “We are closely monitoring the situation and have been in contact with the company. UK GDPR protections remain in full effect.”

Given 23andMe’s history of data breaches, these warnings have struck a nerve with customers who fear their most personal information—genetic data—could be compromised in the sale.

A Troubled History of Data Breaches

The privacy fears are not unfounded. 23andMe has faced serious security breaches in recent years.

The 2023 breach led to multiple class-action lawsuits, ultimately resulting in a $30 million settlement in September 2024. To limit its liability, 23andMe controversially altered its Terms of Use in late 2023, making it harder for users to sue the company.

What Happens Next?

With bankruptcy proceedings now underway, the future of 23andMe remains uncertain. The competitive auction process will determine who acquires the company’s assets, including its treasure trove of genetic data.

For customers, the immediate question is whether their data will remain secure or if they should take action to remove their information before a sale is finalized. For now, the warnings from privacy watchdogs suggest that caution may be the best course of action.