Millionaire ‘mugged’ of bitcoin fortune by masked raiders

An armed gang stole passwords giving access to millions of euros in bitcoin after breaking into the Madrid home of a technology tycoon, according to the alleged victim.

American entrepreneur Zaryn Dentzel, a co-founder of Spain-based social media platform Tuenti, “told police that a gang of four or five men forced their way into his flat” close to the Spanish’s capital Prado art museum on Tuesday afternoon, The Times said.

He claimed that “after covering the security cameras, they tied, bound and gagged” him and “squirted a spray in his eyes”, the paper reported. Dentzel said he was then tortured with a knife and Taser during a four-hour ordeal.

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Police sources told Madrid-based newspaper El Pais that the social media mogul was “left with a cut to his chest and was beaten” by the gang to force him into revealing the passwords for his bank accounts and electronic wallets holding cryptocurrency.

Dentzel reportedly told investigators that the thieves also took laptops, several phones, a tablet computer and a USB stick. But their primary target was said to be the passwords to an online account containing “millions of euros’ worth of bitcoin”, according to Newsweek.

Police “were alerted by a neighbour who heard cries for help coming from the apartment”, The Times reported. Witnesses also “told police that they saw a group of masked men clutching bags run out onto the street”.

Dentzel first “made Spain his home in the mid-2000s”, when he founded Tuenti – dubbed the “Spanish Facebook” – “after having spent time as a student in the Extremadura region learning Spanish”, said El Pais. The platform became popular with young people, gaining millions of users, before being bought by Spanish telecoms giant Telefonica in 2010 for €70m.

Bitcoin has also proved popular since being created in 2009, with advocates lauding the digital currency as a secure way to store and send funds. But since bitcoin can “be created, moved and stored outside the purview of any government or financial institution”, as The New York Times noted, tracing the funds that Dentzel has reported stolen could be challenging for investigators.

However, “each payment is recorded in a permanent fixed ledger, called the blockchain”, the paper added, so using the stolen funds could prove even more tricky as “all bitcoin transactions are out in the open”.