Riot Platforms, Inc., the largest shareholder of Bitfarms Ltd., applied to the Capital Markets Tribunal for an order under s. 127(1) of the Securities Act to cease trade a shareholder rights plan adopted by Bitfarms.
The plan featured a 15% trigger, which was below the 20% threshold established in the take-over bid regime.
Riot did not allege a contravention of Ontario securities law but argued the plan was contrary to the public interest.
The Tribunal clarified the standard for intervening without a contravention, holding that an applicant must demonstrate the conduct undermines clearly discernible animating principles of securities law in a real and substantial way, with a public dimension.
The Tribunal found that the 15% trigger undermined the predictability and certainty of the take-over bid regime.
As Bitfarms failed to demonstrate exceptional circumstances justifying the departure from the 20% threshold, the Tribunal concluded it was in the public interest to cease trade the plan.
