ATHENS (Reuters) - A Russian national suspected of masterminding a money-laundering operation using bitcoin was transferred to prison in Greece on Friday, while the United States prepares documentation to back an extradition request for him.

Russian national Alexander Vinnik, 38, is suspected of operating a digital currency exchange which was the alleged conduit for more than $4 billion in proceeds from illicit transactions.

He was arrested in northern Greece on July 25 on the basis of a U.S. warrant for his arrest and extradition.

"He has gone to a prosecutor, a jail order was issued, and he was escorted to prison today," a senior police official told Reuters.

The official, who spoke on condition of anonymity, said that according to regulations the United States has a two-month window in which to submit the relevant documentation to appeals prosecutors regarding Vinnik's extradition.

Vinnik was arrested at a hotel in the Chalkidiki region. Police seized five mobile telephones, two laptops, two tablets and a router during the arrest.

Local media have reported that Vinnik denies allegations against him. It was not immediately clear if he had a lawyer.

Officials have described Vinnik in a U.S. Justice Department statement as the operator of BTC-e, an exchange used to trade the digital bitcoin currency in operation since 2011.

Vinnik, justice officials alleged, committed crimes which went beyond the lack of regulation of the bitcoin exchange he operated. They have alleged Vinnik and his firm received more than $4 billion in bitcoin, and that BTC-e 'obtained' funds from Mt Gox, a Japan-based bitcoin exchange which collapsed in 2014 after being hacked.

A 'sizeable portion' of the stolen Mt Gox funds were deposited in accounts controlled, owned and operated by BTC-e and Vinnik, the indictment said.

Mt Gox was one of the most prominent examples of how the lightly regulated digital currency could burn investors, after an estimated $450 million worth of bitcoin and $27 million in hard cash vanished when it collapsed.

Reporting By Angeliki Koutantou; Writing by Michele Kambas; Editing by Hugh Lawson

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Alleged bitcoin fraud 'mastermind' sought by US held in Greek prison - Reuters