Bitfarms fears "hostile takeover" by competitor Riot

Tension is high in the crypto mining industry. There is a tense atmosphere between the companies Bitfarms and Riot because of an alleged "hostile takeover." The latter had bought a large number of Bitfarms shares in recent months after a takeover bid was rejected. According to an SEC document, Riot currently owns 13.1 percent of the rival company.

In response, Bitfarms has declared a so-called "poison pill." This is a defensive measure that allows existing investors to acquire shares at a greatly reduced price. The purpose of the measure is to make the hostile takeover financially unattractive by greatly diluting the potential acquirer's shares. In the case of Bitfarms, the new shares are issued once an entity has acquired more than 15 percent of the company.

"This action proves once again that the Bitfarms board has buckled down and ignored the interests of shareholders," Riot CEO Jason Les wrote in a statement.

For its part, Bitfarms wrote in a press release, "The Bitfarms board and special committee took the appropriate steps ... In contrast, Riot has not acted in good faith, but has shown a desire to shorten the review to advance its improper takeover proposal for Bitfarms."