(StraightShooterNews.com) – A massive privacy breach has put millions of Americans at risk after 23andMe filed for bankruptcy.
The concerns stem from millions sharing their most intimate genetic information with the now-failing DNA testing company.
As 23andMe faces total collapse, questions are mounting about what will happen to the sensitive genetic data of over 14 million customers.
Additionally, the bankruptcy sparked debate about whether Big Tech, foreign entities, or government agencies might soon have access to private genetic profiles.
23andMe Holding Co. initiated bankruptcy proceedings in the US under Chapter 11 to facilitate a sale and maximize the value of its business.
The proceedings are taking place in the US Bankruptcy Court for the Eastern District of Missouri.
There, the company faces the challenge of unwinding its operations while protecting customer data.
The once-mighty genetic testing giant has seen its value plummet from a staggering $6 billion in 2021 to a mere $48 million today.
This downturn represents one of the most dramatic business collapses in recent history for a tech company that was once the darling of Silicon Valley investors.
Anne Wojcicki, the co-founder and CEO who launched the company in 2006, has stepped down from her position amid the financial chaos.
Her departure comes after previous unsuccessful attempts to right the sinking ship, though she remains on the board with ambitions to acquire the company as an independent bidder.
Her latest offer values the company’s remaining assets at just $11 million, a fraction of its former worth.
Meanwhile, Chief Financial Officer Joe Selsavage will serve as interim CEO as the company fights for survival through the bankruptcy process.
A catastrophic data breach in 2023 sped up the company’s downfall, affecting nearly 7 million people and exposing highly sensitive genetic information to hackers.
This security failure led to a significant decline in revenues as customers lost trust in the company’s ability to protect their most personal information.
Adding to the company’s woes, 23andMe settled a lawsuit for $30 million related to the data breach, further depleting its already dwindling financial resources.
The company has secured debtor-in-possession financing of up to $35 million from JMB Capital Partners to maintain operations during bankruptcy proceedings.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” said company chair Mark Jensen.
The bankruptcy has forced 23andMe to lay off 200 employees, representing a staggering 40% of its workforce, and halt the development of its therapies division.
The California attorney general has advised users to request the deletion of their data and the destruction of genetic material samples.
What is most concerning is that federal health privacy laws like HIPAA do not cover direct-to-consumer companies like 23andMe
This leaves a massive regulatory gap that threatens the privacy rights of millions of Americans.
The company’s privacy policy allows data sharing with service providers and explicitly reserves the right to transfer customer genetic data in case of sale or bankruptcy.
This means sensitive genetic information could be sold to the highest bidder without meaningful consumer consent.
The fall of 23andMe should serve as a wake-up call for Americans about the risks of entrusting certain companies with their genetic information.
While the Genetic Information Nondiscrimination Act offers some protection against discriminatory use of genetic data by insurers and employers, these protections are limited in scope and enforcement.
Policy experts recommend updating federal privacy laws, expanding HIPAA, and addressing genetic data in bankruptcy cases.
However, until meaningful protections are put in place, Americans should think twice before sharing their genetic information with any company, regardless of their privacy promises.
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