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California reaches $6M settlement with 23andMe over 2023 data breach and bankruptcy asset sale

Confirmed1 source · Oct 19, 2026

California's attorney general accepted $6 million and dropped further appeals after losing legal battles to block 23andMe's bankruptcy sale to a nonprofit controlled by the company's co-founder.

California reaches $6M settlement with 23andMe over 2023 data breach and bankruptcy asset sale
Image via The Guardian

What happened

California attorney general Rob Bonta announced on Monday that the state will receive $6 million in settlement payments from 23andMe's bankruptcy proceedings. The settlement resolves California's claims related to a 2023 data breach that exposed genetic and personal information of 6.9 million customers, including over 855,000 Californians. California had unsuccessfully opposed 23andMe's $305 million sale of assets to TTAM Research Institute, a nonprofit controlled by co-founder Anne Wojcicki, arguing the sale violated California's Genetic Information Privacy Act and that consumers had not given express consent. A US bankruptcy judge ruled against California's objections, and the state lost a subsequent federal district court appeal. As part of the settlement, California agreed to drop further appeals. 23andMe filed for bankruptcy in March 2025 after declining demand and legal fallout from the breach, and separately agreed to pay $46.75 million to data breach victims.

Context

The settlement represents a significant limitation on California's regulatory authority over genetic data transfers during corporate bankruptcies. California had argued that the bankruptcy sale should have been disallowed unless customers first provided express consent to transfer their data, but the courts rejected this position. The outcome leaves consumers with only the option to delete their data post-sale rather than requiring affirmative consent before transfer. This case involves a tension between bankruptcy law's streamlined asset sale procedures and state privacy law protections, with the bankruptcy framework prevailing. The settlement also reflects the financial pressures on state enforcement: California recovered $6 million against a $305 million asset sale it opposed.