FALL FROM GRACE
23andMe files for bankruptcy and CEO dramatically resigns – months after agreeing $30 million data breach settlement
Read on to see the outgoing CEO's statement
23ANDME has filed for bankruptcy that has also seen its CEO dramatically resign months after $30 million data settlement.
It officially declared the filing late Sunday night after failed attempts to rescue the DNA-testing company.
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23andMe recently settled a massive $30 million data breach settlement after almost seven million users had their information stolen.
The US Sun reported at the time that 23andMe was also slammed for failing to tell clients that certain ethnic groups are specifically targeted by hackers who sell their data on the dark web.
Now, the CEO, Anne Wojcicki, has dramatically resigned from the company, as per the WSJ.
Along with the bankruptcy news, it has sent 23andMe into a tailspin as their future is cast into uncertainty.
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Wojcicki said: "I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide."
The company said its chapter 11 filing in the US Bankruptcy Court for the Eastern District of Missouri is “the best path forward to maximize the value of the business.”
23andMe’s chief financial and accounting officer, Joe Selsavage, has been appointed interim CEO.
It has been reported that Wojcicki will remain on the board.
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23andMe has long struggled with its one central business problem: the lack of repeat customers.
People only need their DNA tested once, and 23andMe never found a way to solve this problem, with subscription plans never catching on.
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Plans to have the company develop its own drugs also fell through as a result of rising interest rates.
This left 23andMe as an unattractive proposition for new investors.
Despite doubts over the subscription idea, Wojcicki went ahead with it, offering personalized health reports, lifestyle advice and unspecified “new reports and features as discoveries are made” for an initial $229.
AN UNCERTAIN FUTURE
The problems for 23andMe seemed to be showing after the massive settlement they paid out.
The US Sun reported back then that the future of the biotechnology giant was thrown into uncertainty, as users were advised to delete their data from their site.
Eva Galperin, the director of cybersecurity at the Electronic Frontier Federation, posted on X: "If you have a 23andme account, today is a good day to login and request the deletion of your data."
Hackers used old passwords to break into people's files, which were linked to millions more through ancestry tracing.
23andMe settlement
CHIEFS at the genetics company 23andMe have agreed to pay out $30 milllion in relation to a privacy dispute. The U.S. Sun has broken down the terms of the settlement below:
- A total of $30 million will be paid out.
- The settlement impacts customers whose data was stolen in 2023.
- Hackers used a tactic known as "credential stuffing" to target unsuspecting customers.
- Customers that use the same passwords for different accounts were vulnerable.
- Claimants will be able to apply for payments up to $10,000.
- Residents in some states, including Alaska, California, Oregon, and Illinois, will be able to apply for cash in accordance with state privacy laws.
- It has not been announced when payments will be issued.
In October 2023, data belonging to over four million people in the UK was leaked on a Reddit thread.
In January 2024, 23andMe admitted that attackers stole health reports and raw genotype data between April and September.
In the end, 23andMe's suit saw claimants eligible to claim up to $10,000 in payments, and it resulted in slew of separate lawsuits.
While it was said in a company statement that 23nadMe expected some £25million to be covered by cyber insurance, it was still a heavy blow.
It is unclear what lies ahead for 23andMe, with a new interim CEO left to pick up the pieces.
It is important to note that the settlement on its own did not necessarily lead to the bankruptcy announcement.
Read More on The US Sun
The US Sun has contacted the company for comment on the latest announcement.
23andMe directed The US Sun to its press release detailing the news.
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