Rough week! I need your help!

I had a really bad week this past with my adopted daughter. We adopted her when she was 17 and she is now 21. We have guardian and conservatorship over her right now because she was institutionalized (living in groups homes) the majority of her life. She was in care from 5 to 17. Things have been going really well until this last month. We found out she was lying to us, hadn't been attending classes, been sleeping with several boyfriends, found her biological family and visited them on many occasions without our knowledge and now wants to go live with them and "forget she was ever adopted."

Sad to say, my wife and I are broken hearted and sad. When we adopted her, we never thought this would ever happen. She has unilaterally broken our families hearts and we don't know what to think or to do. What do you think is the best approach for us to take? Should we let her go? or do we let her stay and fight on?