Riot Platforms, a prominent player in the Bitcoin mining sector, has launched a forceful critique against Bitfarms' adoption of a "poison pill" strategy aimed at thwarting Riot's ongoing attempt to acquire a larger stake in the company.

Bitfarms recently implemented a shareholder rights plan, often referred to as a "poison pill," which effectively prevents any single shareholder from acquiring 15% or more of its shares. This defensive move came shortly after Riot Platforms publicly disclosed its intention to increase its existing 12% stake in Bitfarms, positioning itself for a potential hostile takeover bid.

In response to Bitfarms' defensive maneuver, Riot Platforms announced on Wednesday that it had aggressively acquired nearly 6 million shares of Bitfarms through open market purchases over the past week. This move significantly boosted Riot's ownership to 13.1% of Bitfarms' shares, marking a strategic escalation in the corporate power struggle.

CEO Jason Les criticized Bitfarms' defensive tactics in a strongly worded statement, accusing the company of avoiding constructive engagement and transparency. "Instead of engaging with us privately and in good faith, Bitfarms has responded by implementing an off-market Poison Pill with a trigger well below the customary 20% threshold," Les pointed out, highlighting the unusual severity of Bitfarms' defensive measures.

Riot Platforms' aggressive stance follows its recent unsuccessful attempt to acquire all of Bitfarms’ outstanding shares for approximately $950 million. Bitfarms' board of directors had rejected this generous offer, prompting Riot Platforms to explore alternative avenues to gain significant control over the company's operations and strategic direction.

The ongoing power struggle between Riot Platforms and Bitfarms unfolds against a backdrop of internal turbulence within Bitfarms itself. In May, Bitfarms' CEO Geoffrey Morphy was abruptly removed from his position amid contentious governance disputes and concerns over corporate leadership stability. These internal challenges have fueled Riot Platforms' determination to influence and potentially reshape Bitfarms' corporate governance framework.

“We will continue to push to address the serious corporate governance issues at Bitfarms and ensure that shareholders have a meaningful voice in determining the Company’s path forward,” Les reaffirmed, underscoring Riot Platforms' commitment to advocating for shareholder rights and transparency within Bitfarms' management practices.

Neither Bitfarms nor Riot Platforms immediately responded to requests for comment from The Block regarding the latest developments in their corporate struggle for control. As the situation continues to evolve, market observers and investors alike remain attentive to how these developments will impact the trajectory and competitive landscape of the cryptocurrency mining sector.

Bitfarms’ stock (traded under the ticker BITF) closed trading at $2.45, marking a notable 7.8% increase on the day. This uptick reflects investor interest and market sentiment amidst the unfolding drama surrounding Bitfarms' strategic direction and ownership dynamics.

This aggressive pursuit by Riot Platforms underscores the competitive dynamics within the cryptocurrency mining sector, where strategic acquisitions and control over corporate governance can significantly impact market positions and operational strategies. As the battle for control intensifies, stakeholders await further developments and potential resolutions in this high-stakes corporate drama.