DNA for Sale: 23andMe’s Bankruptcy Sparks a Genetic Bidding War
The sale of 23andMe’s vast genetic database raises urgent privacy concerns as bidders line up for the bankrupt company’s most valuable asset.
Editorial Team (ET)July 27, 2025
The collapse of 23andMe has sent shockwaves through the biotech and consumer genetics industries. Once a pioneer in personal DNA testing, the company’s downfall has raised questions about data privacy, corporate governance, and the ethics of selling sensitive genetic information. With a judge approving the sale of its most valuable asset—its vast database of genetic and medical records—the implications for millions of customers are profound.
Despite its ambitious vision of making genetic insights accessible to all, 23andMe struggled financially. After going public in 2021, the company never turned a profit, and efforts to find a buyer failed. When it finally filed for Chapter 11 bankruptcy on March 23, 2025, the most marketable asset left on its balance sheet was the DNA data collected from more than 15 million customers. Now, as the company looks to auction off this treasure trove, concerns over privacy and data security loom large.
The Privacy Debate Intensifies
The decision to sell customer data has sparked an intense debate about the ethical ramifications of such a move. While 23andMe insists that all transactions will comply with privacy laws and existing policies, the idea of personal genetic information changing hands in an auction raises alarms. Customers are increasingly worried about how their DNA might be used and whether it could fall into the hands of companies or governments with interests beyond consumer wellness.
At the bankruptcy hearing, US Bankruptcy Judge Brian C. Walsh acknowledged these concerns but emphasized the need to balance speed with caution. The urgency of the sale stems from 23andMe’s prolonged attempts to secure a buyer before filing for bankruptcy, yet there is pressure from multiple stakeholders—including creditors and consumer advocates—to ensure the process does not compromise customer trust.
Calls for Oversight Amid Data Sale
Regulatory watchdogs are now demanding additional oversight. The US Trustee’s office has recommended the appointment of a privacy ombudsman to monitor the sale and ensure that customers' rights are protected. Legal experts argue that without an independent third party overseeing the deal, there could be significant risks associated with how the data is handled post-sale.
23andMe’s legal team, however, has pushed back on the idea, citing existing privacy protocols as sufficient safeguards. They argue that the company’s data policies already restrict the unauthorized sale of personally identifiable information. Yet, under the US Bankruptcy Code, such sales typically require either compliance with existing policies or intervention by an ombudsman. With privacy advocates keeping a close watch, any misstep in this sale could have far-reaching consequences.
Fallout From the 2023 Data Breach
Compounding the situation is the unresolved issue of a massive data breach in 2023, which affected roughly seven million customers. Hackers gained direct access to around 14,000 user accounts, raising serious concerns about 23andMe’s ability to secure its database. This breach remains a focal point in ongoing legal proceedings, with the company facing around 35,000 claims related to the incident.
The bankruptcy case is expected to provide some resolution to these claims, but the specter of past security failures continues to haunt the process. Critics argue that a company unable to protect its data should not be allowed to sell it without strict oversight. For customers, the breach has only fueled anxieties over what might happen if their sensitive genetic information falls into the wrong hands.
Customers Rush to Delete Their Data
In response to the bankruptcy news and impending data sale, thousands of customers have rushed to delete their genetic records from 23andMe’s platform. State attorneys general have issued consumer alerts, advising individuals on how to remove their information before the sale is finalized. The surge in deletion requests even caused technical issues on the company’s website, reflecting the scale of public concern.
23andMe has reassured customers that they retain control over their data, with the option to delete genetic profiles and request the destruction of stored biological samples. However, the effectiveness of these measures remains a point of contention, particularly as the company transitions to new ownership.
The High-Stakes Auction Begins
With the court approving the sale process, the next phase of 23andMe’s bankruptcy case will determine the fate of its prized genetic database. Bidders now have until May 7 to submit definitive offers, with a final hearing set for June 17. The additional two-week extension granted by Judge Walsh is meant to provide creditors with more time to assess the deal.
This auction will not only decide the company’s financial future but also set a precedent for how personal genetic data is handled in bankruptcy cases. The outcome could influence regulations around consumer biotech and data privacy, reshaping public trust in DNA testing services.
As the auction date nears, all eyes will be on the potential buyers. Who will acquire this vast repository of genetic information? Will the sale prioritize ethics over profit? For millions of 23andMe customers, these questions remain unanswered, and the stakes couldn’t be higher.
