The third largest Bitcoin mining firm on Wall Street is still quietly tightening its grip on Bitfarms (BITF), a smaller Canadian competitor, through a hostile takeover bid.

As of August 13, Riot Platforms (RIOT) increased its stake in Bitfarms to 19%, disclosing its purchase of 1 million more BITF shares last week.

That same day, Bitfarms announced the departure of its co-founder and chair Nicolas Bonta, who Riot publicly targeted for replacement in late June. At the time, Riot called for a special shareholder meeting—now slated for October 29—to let shareholders vote on removing Bonta and two other board members to be replaced with “independent, highly qualified” individuals selected by Riot.

Both are measures to tip the balance of power against Bitfarms’ leadership, which Riot accused of “poor corporate governance” in June after Bitfarms refused Riot’s $950 million acquisition offer in April.

“There is currently no offer on the table from Riot – Riot announced it withdrew its previous proposal to acquire Bitfarms at a price of US$2.30 per share on June 24,” a spokesperson familiar with the matter explained to Decrypt. That said, Riot has signaled that it is “ready to engage” on a new transaction with a reconstituted board, they added.

Early in the process of Riot upping its BITF stake, Bitfarms attempted to adopt a ‘poison pill’ strategy to defend itself. The poison pill is when the company dilutes the shares of an aggressor party if that party acquires an overly large stake in the firm – in this case, 15%. Riot, however, challenged this move and appealed to the Ontario Capital Markets Tribunal, which ruled against Bitfarms' poison pill and effectively terminated it.

“This is the first instance of a high-profile, hostile takeover attempt within the industry,” Nishant Sharma, Founder of BlocksBridge Consulting, a communications and research firm for the mining industry, told Decrypt. “The intensity of this battle highlights the increasing competition and consolidation happening as companies vie for a greater share of the ever-decreasing Bitcoin mining rewards.”

Since the Bitcoin halving in April, profit margins for mining firms have grown much tighter. Bitfarms, however, has held up remarkably well, registering more efficient Bitcoin mining operations in June than almost any other public mining firm, according to JP Morgan.

As of July, the firm had the fifth-largest hashrate capacity among public miners at 10.5 exahashes per second (EH/s). That’s a measure of how much computational power the firm puts towards solving Bitcoin blocks and earning rewards. Were it to merge its hashrate capacity with Riot’s 22 EH/s, the joint company would surpass Marathon’s 31.5 EH/s and make it the largest publicly traded mining firm in the world.

“If Bitfarms remains independent, it would continue to operate as one of the more efficient mining firms,” Sharma added. “Operational improvements suggest that Bitfarms has been able to enhance its mining capacity and efficiency, putting it in a strong position to weather the current industry downturn, regardless of Riot’s takeover attempts.”

A Bitfarms spokesperson told Decrypt that the firm remains on track to this year “deliver the greatest hashrate growth and bottom line improvement in our company’s history.” The firm continues to focus on expansion in the United States and diversifying operations beyond Bitcoin mining.

“Riot has repeatedly demonstrated misalignment with the best interests of Bitfarms’ shareholders,” the Bitfarms spokesperson said. “Bitfarms’ focus is and continues to be on value creation for all Bitfarms shareholders.”

Edited by Stacy Elliott.