New lawsuit aims to halt sale of your data by DNA testing firm | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

23andMe was founded in 2006 and pioneered the direct-to-consumer genetic testing model.

Customers responded positively, ordering DNA testing kits and submitting saliva swabs to find out about their ancestry and make connections with long-lost family members. With this success, at one point, the company’s stock market valuation was close to $6 billion.

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However, after going public and attempting to expand operations into new business lines including health care services and biotechnology, 23andMe ultimately filed for Chapter 11 bankruptcy protection on March 23, 2025.

This did not mean the company discontinued operations, though, and in a Q&A document the company created about the filing, it explained that “your data remains protected. The Chapter 11 filing does not change how we store, manage, or protect customer data.”

Despite these assurances, many customers expressed concerns about the sensitive DNA information they’d submitted to 23andMe, prompting lawmakers to get involved.

In a recent House Oversight Committee hearing, 23andMe’s interim CEO Joseph Selsavage told lawmakers around 15% of the customer base, or 1.9 million people, had requested the deletion of their personal information, but this leaves a substantial amount of DNA data still under the control of the company.

Now, 27 states have initiated a lawsuit that seeks to block the sale of this genetic information, raising questions about whether 23andMe has the right to sell DNA data without express consent.

Will 23andMe sell your DNA data?

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States seek to protect consumer data as 23andMe moves forward with potential sale

As 23andMe’s bankruptcy proceedings have progressed, the plan was initially to sell the company to Regeneron, a biotech company, for $256 million, before 23andMe received an offer from TTAM Research Institute, a nonprofit newly launched by company Co-Founder Anne Wojcicki.

The bankruptcy court reopened the auction to accept final bids from both potential buyers, but as this process played out, 27 states and D.C. filed suit to ask the bankruptcy court to consider whether selling the DNA data from more than 15 million customers is permissible without the express consent of customers.

In court filing documents, the states assert that the transfer of this DNA data is not like an ordinary property sale in bankruptcy proceedings, and that special consideration is required.

“23andMe holds — and is proposing to sell to a third party — an unprecedented compilation of highly sensitive and immutable personal data: a human being’s permanent and everlasting genetic identity….the magnitude of the data in this proposed sale stretches far beyond the 23andMe consumers, impacting those who have no awareness of the sale as well as humans who no longer exist and do not exist yet,” the court filings read.

The states argue that the company can’t just sell this customer information without first getting consent from each of the customers whose DNA data would be part of the transfer.

23andMe says the lawsuit lacks merit

A 23andMe company spokesperson said the AG’s complaints “are without merit,” adding that “customers will continue to have the same rights and protections in the hands of the winning bidder.”

For its part, Regeneron has acknowledged the sensitive nature of the information it would be purchasing, promising to process all of the customer data it receives in accordance with the 23andMe privacy policies that were in place before the sale.

The company committed to complying with both applicable laws and the 23andMe terms of service and said it would put security controls in place to protect customer details.

Still, this assurance was not enough to satisfy the states that are suing, and officials are speaking out to protect the rights of those whose information is at stake.

“New Yorkers and many others around the country trusted 23andMe with their private information, and they have a right to know what will be done with their information. My office is joining 27 other attorneys general to protect people’s most private information and to make sure 23andMe abides by the law,” New York Attorney General Letitia James stated in a June 10 news release.

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The bankruptcy court will need to consider the state’s arguments before the information is handed over.

The good news is that customers still have the opportunity to request closure of their account and deletion of their data, which the company explains can be done through the Account Settings option.