Riot Platforms warns Bitfarms against moves to solidify control

Riot Platforms has called on Bitfarms shareholders to support further changes to the board, urging the company to stay away from moves aimed at strengthening the current board.

Bitcoin (BTC) miner Riot Platforms has called on Bitfarms shareholders to support further changes to the company’s board of directors at a special meeting on Oct. 29 in an effort to “improve value for all shareholders by fixing Bitfarms’ broken governance.”

Riot, Bitfarms’ largest shareholder with a 19.9% ​​stake, expressed concerns about governance practices at Bitfarms in a statement dated September 3, stating that “new perspectives” were needed to increase shareholder value.

In the letter, Riot criticized Bitfarms for its “defensive” tactics to strengthen its current board, including its recently announced acquisition of Stronghold Digital Mining Inc. Riot questioned the timing and terms of the $175 million deal, suggesting that the deal was designed to benefit former executives whose “focus was on preserving their own positions.”

Riot pushes for deeper governance reforms at Bitfarms

Riot also highlighted recent board changes at Bitfarms, calling them “reactive and inadequate” to address fundamental governance issues. While acknowledging the resignation of two Bitfarms co-founders and the appointment of new leadership, Riot argued that these steps fall short of what is needed.

“The evidence is clear: Bitfarms needs additional, truly independent directors with the experience and expertise to ensure that decisions about the company’s future strategy reflect what is best for all shareholders. […]”

Platforms of Revolt

As part of its campaign, Riot narrowed its proposed new directors down from three to two, nominating Amy Freedman and John Delaney to replace the current board members. The letter concluded with a warning to Bitfarms not to take any action that would be “punitively dilutive to all Bitfarms shareholders,” indicating Riot’s intention to hold directors accountable if they did so.