News
23andMe Files for Bankruptcy, Plans Asset Sale Amid Privacy Concerns
<p>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.</p>
<h2>23andMe&#8217;s Rise and Fall</h2>
<p>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.</p>
<p>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.</p>
<p><a href="https://www.theibulletin.com/wp-content/uploads/2025/03/23andMe-DNA-test-kit.jpg"><img class="aligncenter size-full wp-image-56974" src="https://www.theibulletin.com/wp-content/uploads/2025/03/23andMe-DNA-test-kit.jpg" alt="23andMe DNA test kit" width="855" height="603" /></a></p>
<h2>Leadership Shake-Up and Asset Sale</h2>
<p>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.</p>
<p>&#8220;We are committed to safeguarding customer data and ensuring transparency in our management of user data moving forward,&#8221; said Mark Jensen, Chair of 23andMe&#8217;s Board of Directors. &#8220;Data privacy will remain a key factor in any transaction.&#8221;</p>
<p>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&#8217;s assurances.</p>
<h2>Privacy Concerns and Official Warnings</h2>
<p>The potential sale of 23andMe&#8217;s vast database has drawn concerns from consumer protection groups and government agencies alike.</p>
<ul data-spread="false">
<li>The California Attorney General&#8217;s office issued a consumer alert, advising customers to delete their data, destroy their test samples, and revoke research permissions to minimize risk.</li>
<li>The United Kingdom&#8217;s Information Commissioner&#8217;s Office (ICO) emphasized that 23andMe remains obligated to uphold GDPR standards and protect customer data despite its financial turmoil.</li>
<li>ICO Deputy Commissioner Stephen Bonner stated, &#8220;We are closely monitoring the situation and have been in contact with the company. UK GDPR protections remain in full effect.&#8221;</li>
</ul>
<p>Given 23andMe&#8217;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.</p>
<h2>A Troubled History of Data Breaches</h2>
<p>The privacy fears are not unfounded. 23andMe has faced serious security breaches in recent years.</p>
<table>
<tbody>
<tr>
<th>Year</th>
<th>Incident</th>
<th>Affected Customers</th>
</tr>
<tr>
<td>2023</td>
<td>Credential-stuffing attack</td>
<td>6.4 million users</td>
</tr>
<tr>
<td>2024</td>
<td>Health reports and raw genotype data stolen</td>
<td>Undisclosed</td>
</tr>
</tbody>
</table>
<p>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.</p>
<h2>What Happens Next?</h2>
<p>With bankruptcy proceedings now underway, the future of 23andMe remains uncertain. The competitive auction process will determine who acquires the company&#8217;s assets, including its treasure trove of genetic data.</p>
<p>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.</p>

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