Bitfarms and Riot Platforms, two prominent cryptocurrency mining companies, have reached a settlement to end their ongoing governance dispute. The agreement involves changes to Bitfarms’ board of directors and a standstill arrangement between the two companies.
Andrés Finkielsztain will step down from Bitfarms’ board of directors. Amy Freedman will join the board, and Riot Platforms will withdraw its proposal for further board changes.
Riot Platforms has agreed to refrain from taking any hostile actions towards Bitfarms, including attempting a takeover, increasing its stake beyond a certain threshold, or proposing additional board changes until 2026.
Bitfarms will seek shareholder approval to expand its board from five to six members. An independent director nominated by the board will be appointed as the sixth member.
The conflict between Bitfarms and Riot Platforms began in May 2024 when Riot proposed a $950 million buyout of Bitfarms. Bitfarms rejected this offer, leading to escalating tensions between the two companies.
Riot subsequently increased its stake in Bitfarms and sought to implement significant changes to the company’s board of directors. Bitfarms responded by triggering a “poison pill” defense to prevent a hostile takeover.
The governance dispute was further complicated by the lawsuit filed by Bitfarms’ former CEO, Geoffrey Morphy. Morphy accused the company of breach of contract, wrongful dismissal, and sought $27 million in damages.
The settlement between Bitfarms and Riot Platforms marks a significant resolution to the governance dispute. The agreement will help to stabilize the company and focus on its core business of cryptocurrency mining. While the cryptocurrency industry continues to evolve, it is essential for companies to address governance issues and maintain positive relationships with their shareholders.
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Author: Sb
