The public dispute between Toronto-based Bitcoin mining company Bitfarms and its investor and competitor Riot Platforms is finally drawing to a close, as both companies have entered into a settlement agreement that includes key changes to Bitfarms’ board.
As part of the settlement, which was filed with the United States Securities and Exchange Commission today, director Andrés Finkielsztain has stepped down from Bitfarms’ board. Bitfarms has appointed Amy Freedman to its board and its governance, nominating, and compensation committees.
“We look forward to supporting a reconstituted Bitfarms board and continued engagement with management.”
Jason Les, Riot Platforms CEO
Riot, meanwhile, has withdrawn its June requisition to hold a vote aimed at reconstituting Bitfarms’ board. Riot has also committed to refrain from any actions that might disrupt or challenge Bitfarms’ control or operations until the company’s 2026 annual meeting, a move Bitfarms described as “customary standstill provisions.”
In a statement, Riot CEO Jason Les said the settlement marks an important step to advance shareholder value creation at both companies.
“As Bitfarms’ largest shareholder, we look forward to supporting a reconstituted Bitfarms board and continued engagement with management,” Les added.
According to Bitfarms’ latest announcement, the special meeting of shareholders, which was initially slated for October 29, will now take place no later than November 20. At this meeting, shareholders will vote on expanding the board from five to six members, electing an independent director nominated by the board, and ratifying Bitfarms’ shareholder rights plan. Bitfarms said Riot has agreed to vote in favour of these changes.
Under the terms of the settlement, Riot has also been granted the right to purchase additional shares of Bitfarms, as long as it continues to own at least 15 percent of the company’s total outstanding common shares.
“We are pleased to reach this agreement with Riot and look forward to turning our full attention to executing our growth strategy,” Bitfarms CEO Ben Gagnon said in a statement. “We remain focused on diversifying the business beyond Bitcoin mining into exciting and synergistic new areas like energy generation, energy trading, heat recycling, and other high-value revenue streams.”
Boardroom brawl
Founded in 2017, Bitfarms owns and operates Bitcoin mining farms and provides computing power to cryptocurrency networks. The company trades on the Toronto Stock Exchange and Nasdaq under the symbol “BITF.” Colorado-based Riot is currently the largest shareholder in Bitfarms.
This settlement between Bitfarms and Riot follows nearly six months of public clashes between the two companies. The tension began in the spring when Riot revealed that Bitfarms had rejected its $950-million USD bid to acquire the company.
This rejection prompted Riot to issue public statements questioning Bitfarms’ leadership and to gradually increase its stake in the company. In response, Bitfarms attempted to adopt various ‘poison pill’ strategies via shareholder rights plans to prevent Riot from gaining further control.
RELATED: Riot Platforms raises stake in Bitfarms following Riot’s rejected takeover bid
In June, Riot requisitioned a special meeting that would have given Bitfarms shareholders the chance to vote out Bitfarms chairman and interim CEO Nicolas Bonta and Finkielsztain. Bonta, for his part, stepped down in August and was replaced by Ben Gagnon as CEO and Brian Howlett as chairman.
Riot’s June requisition also proposed replacing Bonta, Finkielsztain, and recently departed co-founder Emiliano Grodzki with three new board members. Incoming board member Freedman was one of the nominees put forward by Riot.
In August, Bitfarms announced plans to acquire American firm Stronghold Digital Mining in a $125-million USD stock-for-stock merger deal. An industry expert indicated to BetaKit that Bitfarms may have turned down Riot’s acquisition offer to avoid jeopardizing this merger, adding that Riot would likely need additional capital to successfully acquire Bitfarms in light of the deal.
The announcement of the Stronghold merger led to another testy public exchange, with Riot warning that Bitfarms’ board “should not enter into any financing transaction” before a special shareholder meeting could be held.
Both companies’ stocks have increased since the announcement of the settlement. BITF traded at $2.06 USD at press time, up 2.75 percent today.
With files from Alex Riehl.
Feature image courtesy of Unsplash. Photo by Benjamin Child.