The genetic testing company 23andMe has been making headlines, but not for the reasons it might hope. Once celebrated for helping people uncover their ancestry and health insights through a simple saliva test, 23andMe is now facing a storm of legal and financial challenges. In June 2025, 27 U.S. states and the District of Columbia filed a lawsuit against the company to block the sale of customers’ genetic data during its bankruptcy proceedings. This move underscores growing concerns about the privacy of millions of users’ DNA profiles. Let’s dive into what’s unfolding with 23andMe and what it means for its customers.
Why Are States Suing 23andMe?
The lawsuit, filed in a Missouri bankruptcy court, centers on 23andMe’s plan to auction its assets, including the genetic data of over 15 million customers. After filing for Chapter 11 bankruptcy in March 2025, the company announced intentions to sell its business due to declining consumer demand and a 2023 data breach that exposed sensitive information. States like New York, Pennsylvania, and California argue that selling this data without explicit customer consent violates privacy rights. New York Attorney General Letitia James emphasized that people deserve to know how their genetic information will be handled. California’s Attorney General Rob Bonta also raised alarms, citing state laws that restrict the transfer of sensitive genetic material.
The states’ concern isn’t just theoretical. The 2023 breach compromised the data of nearly 7 million users, including names, birth dates, and genetic profiles, with some information even appearing for sale on the dark web. This history has fueled distrust, making the potential sale of 23andMe’s database a flashpoint for privacy advocates.
23andMe’s Response and Business Moves
23andMe has pushed back, claiming the lawsuit lacks merit. The company insists that any sale would comply with its privacy policies and applicable laws, ensuring customers retain the same protections under a new owner. It’s worth noting that 23andMe has been navigating rough waters for a while. After going public in 2021, it struggled to turn a profit, leading to a 40% staff cut and the bankruptcy filing. Recently, the company received a $305 million bid from co-founder Anne Wojcicki, outpacing a $256 million offer from Regeneron Pharmaceuticals. This bidding war suggests 23andMe’s data remains valuable, but it also raises questions about who will control it and how they’ll use it.
| Key Event | Date | Details |
|---|---|---|
| Bankruptcy Filing | March 2025 | 23andMe files for Chapter 11 due to financial struggles and 2023 data breach. |
| Lawsuit by 27 States | June 2025 | States seek to block sale of genetic data without customer consent. |
| Bidding for Assets | June 2025 | Wojcicki offers $305M; Regeneron bids $256M for 23andMe’s assets. |
Privacy Concerns Take Center Stage
The heart of the issue lies in the sensitivity of genetic data. Unlike a credit card number, DNA reveals deeply personal details about health risks, ancestry, and even potential relatives. Customers used 23andMe’s saliva kits to explore their heritage or assess health predispositions, often unaware that their data could be sold in a bankruptcy scenario. Oregon Attorney General Dan Rayfield called this data “too sensitive” to be treated like ordinary property. The lawsuit argues that each customer should give informed consent before their DNA profile is transferred to a new owner.
This isn’t the first time 23andMe has faced scrutiny over data privacy. The 2023 breach led to a $30 million settlement in 2024, offering affected customers cash payments and three years of security monitoring. That incident, which targeted users with Chinese and Ashkenazi Jewish ancestry, eroded trust. Now, with the company’s future uncertain, customers are left wondering how secure their information really is.
What’s Next for 23andMe and Its Users?
The bankruptcy court will play a pivotal role in deciding whether 23andMe can proceed with its asset sale. If the states win their case, the company may need to secure explicit consent from millions of users—a logistical nightmare. Meanwhile, customers can still access their accounts and genetic reports, and 23andMe insists operations will continue as normal during the bankruptcy process. For users concerned about privacy, the company offers options to delete data or opt out of research, though some worry these measures come too late.
The outcome of this legal battle could set a precedent for how genetic data is handled in corporate bankruptcies. As companies like 23andMe navigate financial woes, the question of who owns and controls our DNA becomes more urgent. For now, the company’s fate—and the privacy of its 15 million users—hangs in the balance.
If you’re a 23andMe user or considering genetic testing, stay informed about this case. Check your account settings to manage your data preferences and explore options for protecting your privacy. Visit 23andMe’s customer care page for guidance on deleting your data or opting out of future research.