In March 2025, 23andMe asked a bankruptcy court to sell its assets, and the assets on offer included a database of genetic data from about 15 million customers. The case answered a question the industry had avoided: when the company that holds your DNA is sold, who decides what happens to it? This piece, part of our Cognitio series, sets out the answer, what the law does and does not cover, and what decentralised and confidential-computing designs can and cannot change.
What happened to 23andMe’s customer data
The company’s troubles began with a breach, not a sale. Attackers reused passwords stolen from other websites to enter about 14,000 accounts. The DNA Relatives feature, which matches customers with genetic cousins, then exposed profile data on roughly 6.9 million people. The company had made two-factor verification optional. It became mandatory only after the attack.
| When | What happened | Source |
|---|---|---|
| April to September 2023 | Credential-stuffing attack on about 14,000 accounts exposes profile data on about 6.9 million people through DNA Relatives and family-tree features. | HIPAA Journal |
| March 2025 | 23andMe files for Chapter 11 in Missouri. About 1.9 million customers, roughly 13 percent, ask for their data to be deleted. | HIPAA Journal |
| 31 March 2025 | The chair of the US Federal Trade Commission writes to bankruptcy officials: “Consumers should be able to trust that companies will keep their promises, including when it comes to handling of sensitive information.” | The Record |
| June 2025 | The UK data regulator fines the company £2.31 million for weak authentication and a slow response. The court’s privacy ombudsman says customers should give “separate and affirmative” consent before their data is sold. | ICO, The Record |
| End of June 2025 | The court approves the sale to TTAM Research Institute, a nonprofit led by co-founder Anne Wojcicki, for $305 million. Regeneron had earlier won the auction at $256 million. | OPB, BankInfoSecurity |
| July 2026 | 42 state attorneys general settle their breach claims. The headline is $150 million in allowed claims, but the cash paid to the states is limited to $18 million. | Delaware AG, Troutman |
Who owns the data when the company is sold
No single property rule settled it. A bankruptcy court, a privacy ombudsman, the FTC and state attorneys general each pulled on a different thread.
The court’s privacy ombudsman, Neil Richards, called the database “one of the most … sensitive collections of data about identified people ever sought to be discharged in bankruptcy”. He noted that millions of customers had not logged in since the company updated its privacy statement in 2022 to mention a bankruptcy.
The FTC pointed to the company’s own wording. The privacy statement said it would apply to personal information “as transferred to the new entity”. The policy itself contemplated a transfer.
Judge Brian Walsh approved the deal, writing that it involves a sale of customer data “only in a technical sense”. The buyer’s lawyers say the assets moved through a non-debtor subsidiary to comply with state genetic-material transfer laws. TTAM promised to keep the existing policies, preserve deletion, notify customers, and set up a privacy advisory board.
That is a reasonable outcome, and it depended on choices rather than rules: a buyer willing to keep the promises, and regulators who showed up. One law-firm summary of the later settlement says it shows that “bankruptcy discharge does not fully extinguish state enforcement authority”. The customers’ most direct protection was the delete button, which about 13 percent used, and it cannot be undone. Deleted data cannot be pulled back from research already completed.
A patchwork, not a rule
| Rule | What it does | What it leaves out |
|---|---|---|
| HIPAA | Covers providers, health plans, clearinghouses and their business associates. | Rarely covers a test bought directly by a consumer. |
| GINA (2008) | Bars health insurers and employers from using genetic information against you. | Life, disability and long-term care insurance. It is not a privacy law. |
| State laws | Montana amended its genetic privacy act in 2025. Texas now bars sending genomic data to foreign adversaries in a bankruptcy sale. | Coverage varies by state. See Inside Privacy. |
| Federal bills | The Don’t Sell My DNA Act would require notice and consent before genetic data is sold in bankruptcy. The Genomic Data Protection Act targets direct-to-consumer firms. | Both were introduced in 2025 and referred to committee, with no later action recorded as of October 2026. |
A genetic test sold online sits mostly under the company’s own contract, enforced after the fact by regulators.
Your genome is also your relatives’
Consent from one person cannot cover a family. A 2018 study in Science analysed 1.28 million people tested with consumer genomics. It projected that about 60 percent of searches for people of European descent would find a third cousin or closer, enough to identify them.
Police used the same logic in 2018. The Golden State Killer suspect never uploaded his own DNA. Investigators found his relatives in a public genealogy database and built the family tree from there. The 23andMe breach worked the same way at scale: 14,000 compromised accounts opened a view onto millions of relatives who had logged in to nothing.
What decentralised science and confidential computing change
Decentralised science (DeSci) projects try to move custody and consent out of one company’s database. The technical idea is compute-to-data: researchers send their analysis to the data instead of downloading the data.
Nebula Genomics and Oasis Labs announced a version in 2020. After checking permissions against a ledger, the encrypted genome and the analysis load into an isolated “secure enclave”, and users can see a log of each access. It moves trust rather than removing it.
| Design | What it protects against | What you still trust |
|---|---|---|
| Company database and policy | Nothing beyond the promise | The company, its buyers and its security |
| Enclave-based compute-to-data (TEE) | Operators and researchers reading raw genomes | The chip maker, the attestation process and the code |
| Cryptographic methods (MPC, FHE) | Needing trusted hardware at all | Slower runs: FHE carries roughly 100 to 1,000 times overhead |
| On-chain consent record | Quiet, unrecorded access | The key holder and whatever sits outside the chain |
Enclaves have limits. In October 2025, researchers showed that a roughly $1,000 device placed between processor and memory could extract an Intel SGX attestation key. Intel said such physical attacks fall outside its threat model. The researchers’ demonstration targeted several SGX networks, Secret Network among them, on test networks. Secret Network paused new nodes, set up an allowlist and rotated its seed. A December 2025 genomics paper adds that side-channel leakage is “inherent to the design of current TEEs”.
The weak point can also be the website. A proposed class action filed in October 2024 alleges that Nebula Genomics, which the complaint describes as marketing “privacy first DNA testing”, ran Facebook, Google and Microsoft tracking tools on its site. These are allegations, not findings. Encryption around a vault does not protect the page in front of it.
One example in practice: Secret³ and DEPH Network
Cognitio, the Blockleaders show hosted by Justin Roberti, put the 23andMe question to Ian Spiegel, introduced on the show by Lisa Loud as the team’s CTO. Secret³ is the relaunch of Secret Network, which the host said had gone through a community takeover and which DEPH Network has just launched on. Spiegel put leaks at platforms like 23andMe down to who has access and why. He described the team’s design this way: “all of that can be permissioned by the user on who has access and why.”
DEPH’s own site describes the same shape: health data that “stays encrypted and off-chain”, with the record of access and rewards kept on-chain. Its $DEPH token is marked “coming soon,” with details to be confirmed, so the reward model is still a plan. Spiegel also said on the show that Secret is moving from “secret contracts” to confidential virtual machines. The design is still changing, and the hardware caveats above apply to it.
Questions to ask before you send a sample
- What does the policy say happens in a sale or bankruptcy, and will you be asked again?
- Can you delete the data and the physical sample, and does deletion reach research already done?
- Is two-factor verification on by default?
- Which relatives could be identified through your results?
- If a service says “decentralised,” what does it still trust: hardware, a website, a token?
Better engineering helps, but it does not replace law. Until consent before sale is a rule rather than a negotiation, the safest genetic data is the data a company never holds in readable form.
This article is part of Blockleaders’ coverage of Cognitio, the Blockleaders show hosted by Justin Roberti, from the episode “The AI Secret to Better Health: DEPH Network on Secret3” with Lisa Loud, Sam Thompson and Ian Spiegel. Watch the full episode. Earlier in the series: part one on sex-specific epigenetic clocks; part three on private AI health coaches.
Sources
All opened and read for this rewrite (accessed 2026-10-01) unless marked.
- HIPAA Journal, 6.9 million 23andMe users affected: https://www.hipaajournal.com/6-9-million-23andme-users-affected-by-data-breach/
- HIPAA Journal, 23andMe bankruptcy (filing, 1.9 million deletion requests, HIPAA gap): https://www.hipaajournal.com/genetic-testing-company-23andme-files-for-bankruptcy/
- The Record, FTC says 23andMe purchaser must uphold privacy policy: https://therecord.media/ftc-23andme-purchaser-data-privacy
- The Record, privacy ombudsman recommends consent for sale: https://therecord.media/23andme-privacy-ombudsman-recommends-consent-sale
- UK ICO, 23andMe fined £2.31 million: https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2025/06/23andme-fined-for-failing-to-protect-uk-users-genetic-data/
- OPB, judge approves sale to TTAM: https://www.opb.org/article/2025/07/01/judge-oks-sale-of-23andme-to-a-nonprofit-led-by-its-founder/
- BankInfoSecurity, court approves sale (Regeneron $256 million, TTAM commitments): https://www.bankinfosecurity.com/court-approves-23andme-sale-to-ttam-research-institute-a-28885
- Quinn Emanuel (TTAM’s counsel, interested party), auction and deal structure: https://www.quinnemanuel.com/the-firm/publications/quinn-emanuel-secures-an-unprecedented-win-for-anne-wojcicki-and-ttam-research-institute-in-23andme-bankruptcy-auction/
- Delaware Attorney General, multistate settlement, 14 July 2026: https://news.delaware.gov/2026/07/14/ag-jennings-announces-multistate-settlement-of-bankruptcy-claims-against-23andme-over-genetic-data-breach/
- Troutman Pepper, State AGs reach novel multistate settlement: https://www.troutmanprivacy.com/2026/07/state-ags-reach-novel-multistate-settlement-with-genetic-testing-company-23andme/
- Regulatory Oversight (Troutman), same settlement: https://www.regulatoryoversight.com/2026/07/state-ags-reach-novel-multistate-settlement-with-genetic-testing-company-23andme/
- Petrie-Flom Center, The 23andMe bankruptcy, Part 2: https://petrieflom.law.harvard.edu/2025/05/07/the-23andme-bankruptcy-privacy-considerations-and-a-call-to-action-part-2/
- AccountableHQ, HIPAA and direct-to-consumer genetic testing: https://www.accountablehq.com/post/hipaa-and-direct-to-consumer-genetic-testing-what-applies-and-what-doesn-t
- National Human Genome Research Institute, Genetic Discrimination (GINA): https://www.genome.gov/about-genomics/policy-issues/Genetic-Discrimination
- Inside Privacy (Covington), multiple states enact genetic privacy legislation in 2025: https://www.insideprivacy.com/health-privacy/multiple-states-enact-genetic-privacy-legislation-in-a-busy-start-to-2025/
- Erlich et al., Science 2018 (Hebrew University record): https://cris.huji.ac.il/en/publications/identity-inference-of-genomic-data-using-long-range-familial-sear/
- The Conversation, how police used a public genealogy database in the Golden State Killer case: https://theconversation.com/how-cops-used-a-public-genealogy-database-in-the-golden-state-killer-case-95842
- Help Net Security, Nebula Genomics and Oasis Labs (2020): https://www.helpnetsecurity.com/2020/09/22/nebula-genomics-oasis-labs/
- BlockEden, ZK vs FHE vs TEE vs MPC (January 2026): https://blockeden.xyz/blog/2026/01/27/privacy-infrastructure-zk-fhe-tee-mpc-comparison-benchmarks/
- The Hacker News, WireTap attack on Intel SGX: https://thehackernews.com/2025/10/new-wiretap-attack-extracts-intel-sgx.html
- Secret Network, security update on Intel SGX vulnerabilities (30 September 2025): https://scrt.network/blog/secret-network-security-update-intel-sgx-vulnerability-response
- Dokmai et al., TX-Phase, Genome Research, December 2025: https://pmc.ncbi.nlm.nih.gov/articles/PMC12667372/
- ClassAction.org, Nebula Genomics complaint summary: https://www.classaction.org/news/class-action-claims-nebula-secretly-shares-genetic-test-results-with-facebook-google-microsoft
- DEPH Network (company site, a self-description): https://www.dephnetwork.com/
- Episode transcript, local file TRANSCRIPT_WHISPER_VERBATIM.txt (Spiegel, 22:08 to 22:16; Roberti, 01:41 to 01:51; Spiegel on confidential virtual machines, 36:00 to 36:46). Episode video: https://www.youtube.com/live/NBCuJ0IgM9Q
