States Challenge 23andMe Over Genetic Data Sale in Bankruptcy Deal
This illustration picture shows a saliva collection kit for DNA testing displayed in Washington DC on December 19, 2018.

On Monday, 27 states and the District of Columbia filed a lawsuit against 23andMe, aiming to block the company from selling customers' personal DNA information without their consent.

A bankruptcy court case is underway as Regeneron Pharmaceuticals moves forward with plans to purchase the struggling company for $256 million, ABC News said.

The lawsuit argues that deeply personal genetic information, such as DNA samples, medical traits, and health data, should not be treated as ordinary property and sold off as part of a bankruptcy settlement.

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"Customers should have the right to control such deeply personal information," said Oregon Attorney General Dan Rayfield in a statement. "It cannot be sold like ordinary property."

Founded in 2006, 23andMe gained popularity for its saliva-based DNA kits that help people learn about their ancestry and connect with relatives.

Over time, the company also expanded into medical research and drug development. But since going public in 2021, the company has struggled financially.

23andMe's Bankruptcy Sparks Data Privacy Fears

In March 2025, 23andMe cut 40% of its staff and filed for Chapter 11 bankruptcy in a Missouri court.

This raised serious questions about what would happen to the private data of millions of users.

Regeneron, a pharmaceutical company, states that it intends to acquire 23andMe and assures that it will comply with all applicable privacy rules and laws.

According to the AP, the company also stated that it will only use personal data in accordance with the consents and privacy agreements already in place. It also promised to keep security controls in place to protect the information.

Still, state leaders and privacy advocates are concerned. They say that no sale involving sensitive health and DNA data should happen without each customer's explicit approval.

To help review the deal, a court-appointed privacy ombudsman has been tasked with investigating how the sale might impact users' personal information. That report is expected to be submitted to the court by Tuesday.

Originally published on vcpost.com