23andme applies for insolvency protection
After 23andme millions of customer data were stolen, the company was to be sold – unsuccessfully. Now a court is to help. Users can delete data.
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A year and a half after 23andme admitted to an immense data theft, the genetic analysis company has now applied for insolvency protection and support for a sale. This was announced by 23andme on Sunday, adding that Managing Director Anne Wojcicki had also stepped down from her position with immediate effect. According to the news agency Reuters, the most recent offer was USD 0.41 per share, while a month ago the Board of Directors rejected an offer of USD 2.53 per share. This means that 23andme would now only be valued at USD 11 million, compared to USD 50 million on the stock exchange. In 2021, it was still worth 3.5 billion.
Data from millions of people tapped
In October 2023, 23andme made it public that data from people who had their genes analyzed was being offered for sale by criminals. It gradually emerged that unknown individuals had managed to access account data using credential stuffing. This means that they were able to log in with captured access data from other services because they were reused for 23andme. Ultimately, the data of almost seven million users was offered for sale on the darknet. A class action lawsuit ended in a settlement, and those affected are to be compensated with a total of 30 million US dollars.
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Following the events, 23andme lost a lot of value, with the share price falling by 75% in 2024. Compared to the high at the beginning of 2021, the decline now amounts to more than 99 percent. In September, all seven board members, with the exception of CEO Anne Wojcicki, resigned and declared in a letter that they did not agree with the "strategic direction of the company". Wojcicki planned to delist the company from the stock exchange. A previous attempt to do so failed on March 10. Now the sale is to be achieved with the help of the courts, but without Wojcicki at the helm.
Now that 23andme's financial difficulties have become apparent, California's Attorney General Rob Bonta pointed out on Friday that people in his state have the right to have their data deleted. This also applies to customers in Europe; 23andme falls under the General Data Protection Regulation (GDPR). The destruction of genetic material in the company's possession can also be requested. Bonta had expressed concern about the sales plans. The fear is that this material could fall into the hands of others in the course of a sale. In the fall, it became known that 23andme would not destroy all material even in the event of data deletion.
(mho)
