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23andMe Files for Bankruptcy – What You Need to Know!

Roberta Estes

I dreaded this day, but 23andMe has filed for bankruptcy protection from their creditors. 23andMe announced this turn of events publicly with an open letter to their customers, here, and the attorney general for the State of California, where 23andMe is located, has issued an urgent consumer alert, here, suggesting that customers may want to consider deleting their data at 23andMe.

Let me be very clear – this is ONLY related to 23andMe and no other DNA testing company.

What is Going On?

With 23andMe filing for bankruptcy, the assets of 23andMe now fall under the supervision of the bankruptcy court. The court’s job is to oversee the planning of a “fresh start” by liquidating assets and/or creating repayment plans for fair and orderly debt payment to 23andMe’s creditors.

From the 23andMe blog article:

Filing for Chapter 11 protection under the U.S. Bankruptcy Code is a reorganization process that allows for a company to restructure its finances and operations, including though (sic) a sale of certain or all of its assets, while continuing to operate its business.

I wrote about the problems at 23andMe last September in the article, “23andMe Trouble – Step-by-Step Instructions to Preserve Your Data and Matches.”

I strongly recommend that you read that article, because it includes additional information that I’m not repeating here, such as how to preserve your data and how to download your DNA files. It also includes other resources and articles that detail the history of what has occurred.

When I wrote that article, I calculated the $ burn rate based on financial information provided by 23andMe. I’m not a financial analyst, so I didn’t share that calculation, but unless something changed dramatically, they would be out of money about now. And indeed, they are.

Some people interpreted 23andMe’s presence at RootsTech, combined with their promises about features they are planning to resuscitate, as a good sign, but I suspected it was a last gasp and an attempt to generate immediate revenue via sales. New features or even old features redesigned and re-released require developers and staff. A company on the threshold of bankruptcy would be running very lean.

There’s nothing wrong with attempting to generate revenue, of course, and I’m glad they are/were trying to stay in business, but it appears it may have been too little, too late.

Having said that, the bankruptcy court may restructure their debt without selling (all of) their assets. We simply don’t know.

Therein lies the problem. We simply don’t know.

What Does This Mean to Genealogists?

23andMe’s focus has never been about genealogy, but on health, medical research, and big pharma. That means they never developed the tools that genealogists requested, as genealogy did not align with their corporate goals. At one point, 23andMe partnered with MyHeritage for trees, but when that relationship was discontinued, 23andMe never offered trees – a foundation of genealogy.

23andMe welcomed genealogists to test, of course, hoping that a substantial number of their 16 million customers would opt-in to sharing their DNA for research.

Many genealogists, me included, made important discoveries at 23andMe – particularly people who were looking for close relationships, given that 23andMe was the first company to offer autosomal testing in 2007. Often people who tested at 23andMe, specifically for medical or health results, are not found in genealogy databases, making 23andMe a unique and important resource for adoptees and people searching for unknown close relatives.

Unfortunately, after their data breach in the fall of 2023, many of the features enjoyed by and critical to genealogists were removed and never returned.

DNA is a Non-Repeat Business

One of the challenges facing 23andMe is that without other features and benefits, such as trees or records data, or at least multiple types of DNA testing with features genealogists want, DNA testing is a one-and-done proposition. That’s why companies update their ethnicity and come up with cool new genealogy features – to keep you coming back.

23andMe introduced some features behind a subscription wall, which generated ongoing revenue, but most of those are health-focused. For a genealogist, they hold little allure, and given that you can’t just subscribe, but are required to retest – well – for me, it just wasn’t going to happen.

The bottom line is that 23andMe’s current financial situation, especially since the expensive $30 million data breach settlement, is untenable. Hence, the bankruptcy.

Your DNA is an Asset

I don’t know what’s going to happen, but your DNA file, the fact that you opted-in for research (if you did), and you as a customer are all considered part of their corporate assets which are now available for sale, under bankruptcy protection. In other words, another company, with court approval, could purchase their database or some portion thereof.

23andMe is officially for sale, in whole or in part.

From the 23andMe blog article:

It’s also important to note that they are not just turning the lights off. From their blog:

Review Your Account

Regardless of what you decide to do, now would be a good time to review your 23andMe account to be sure you understand:

You can also delete your results and close your account, but if you make that decision, please do so AFTER downloading anything you want, including your DNA file, which you can safely upload, for free, to:

You’ll find instructions here.

I’m not saying that the sky is falling, but I am suggesting that you take few minutes and evaluate your relationship with 23andMe, why you tested, your goals, and any current or potential benefits you may receive from your DNA being at 23andMe.

You’ll need to weigh your personal goals against the unknown, meaning who may purchase the 23andMe assets and your comfort level.

Step by Step Instructions

Let me begin this section by saying that the 23andMe website has been either exceedingly busy/slow or unavailable today, for obvious reasons.

Many people are probably signing in that haven’t done so in a long time. So, if you can’t get in right away, please don’t panic. Just try again later.

Please note that one of the steps to delete your information is by verifying your birthday and year, so if you have not added that information, do so before you attempt to delete your kit.

You can do this in Step 1.

Step 1 – Check Your Birth Date

Select Settings at upper right when you sign on.

Scroll down to Date of Birth and then click on View/Edit.

While you are there, review the rest of your settings to be sure they are what you want.

Step 2 – Check Your Sample Storage (Biobanking)

Under settings, scroll down to Preferences.

If you’ve given 23andMe permission to store your sample, that authorizes them to run additional tests if you also authorize genetic research.

Your current selection is displayed. To edit your choice, click on edit and make your changes. You can read more about biobanking at 23andMe here.

If you previously elected to store your DNA sample, you can change that preference and any remaining DNA sample will be destroyed.

Making this decision does NOT close your account and does not affect your ability to use your account. That is a completely separate action.

Step 3 – Check Your Status for Participating in Genetic Research

To check your consent settings for research, under Settings, scroll down to “Research and Product Consents.”

Review your answers and click Edit to make changes.

If you previously elected to participate in research, you can change that preference at any time without affecting your ability to use your account. Changing this preference at 23andMe does NOT close your account, which is a completely separate action.

Step 4 – Download Your Data

Regardless of whether you delete your data or not, this is a good time to download your data. Under Settings, scroll all the way to the bottom to the section titled 23andMe Data.

Click on View to read more or to either download your data or delete your data/account.

Please do NOT delete your account until you read Step 5, below.

23andMe generates several types of data that you may wish to download.

Step 5 – Deleting Your Data (if that’s your decision)

I’m not saying you should delete your data. In fact, I’m not making a recommendation either way. That decision is entirely up to you.

Here are some additional factors to consider.

Here’s what 23andMe says about an account closure request:

If you participated in 23andMe Research, your Personal Information will no longer be used in any future research projects. If you asked us to store your genetic samples, they will be discarded. We will retain limited information about you, including records of this deletion request, and other information as required by law and otherwise described in our Privacy Statement.

If you have questions about your privacy, contact privacy@23andme.com, and if you have issues with account settings or data deletion, contact  customercare@23andme.com, or use their chat feature.

To be clear, data deletion and account closure is one action, occur together, and are permanent and irrevocable. If you change your mind, you can always choose to retest later, which you would have to do anyway if you ever wanted to subscribe to their updated features.

The Big Question

Now, everyone is going to be asking themselves if they want to update their permissions or delete their account – or maybe some people aren’t concerned at all.

I want to reiterate that this situation solely involves the uncertainty surrounding the status of 23andMe and its asset distribution during bankruptcy.

No other DNA testing company is affected.

I know you’re all wondering what I’m going to do.

Truthfully, I haven’t entirely decided, but at least one of my consideration is probably different from yours.

Were it not for my blog and my desire to provide you with the best up-to-date quality information, both here and in presentations, I would have deleted my data from 23andMe some time ago.

I have already revoked all research consents and have never stored my DNA at 23andMe because they never had multiple DNA products, so there was never any possibility of upgrading. In other words, my DNA storage would have been for their benefit, not for mine.

Here’s what the 23andMe website says under “Delete Data”:

What happens to my data if the company is sold or otherwise changes ownership?

If the company does change ownership in the future, your data will remain protected under the current 23andMe Privacy Policy unless and until you are presented with materially new terms, with appropriate advanced notice to review those material changes as required by law.

I don’t know how much comfort this brings you. It appears we would receive notice.

We’ve all thought of the negative scenarios, but there’s another side to this coin too.

As you ponder the situation, remember that the primary candidates to purchase 23andMe, or the database, would be other DNA testing companies. I have my fingers crossed, personally, because I’d love to preserve these matches AND obtain better tools. That could be a win-win for everyone.

And if 23andMe does not survive as a company, and another genealogy DNA company doesn’t purchase the database, you can always delete your data and close your account when we have a better handle on the outcome.

So, for now, I’m waiting but I’m also monitoring the situation VERY closely! You can read more about the court proceedings and bankruptcy restructuring as it progresses, here.

So, what’s your decision? Stay, go, or wait?

If you go, I hope you at least make lemonade out of this situation by uploading to both FamilyTreeDNA and MyHeritage if you haven’t already done so or haven’t yet tested there directly.

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