Ian Freeman, a Keene resident arrested Tuesday and charged by federal prosecutors with running an unlicensed scheme to sell virtual currency, remained in custody Friday evening as a judge considered releasing him on bail.

U.S. Magistrate Judge Andrea K. Johnstone presided over a detention hearing conducted remotely that afternoon, but a ruling in the case had not been filed in a federal database as of 7:30 p.m.

Freeman, a locally known activist, has been held at the Merrimack County jail in Boscawen since Tuesday.

In the hearing in U.S. District Court for New Hampshire on Friday, federal prosecutors offered additional evidence in their case against Freeman, who is facing charges that include operating an unlicensed money-transmitting business, wire fraud, money laundering and operating a continuing financial crimes enterprise.

Prosecutors allege in an indictment filed Monday that he committed the latter crime by repeatedly defrauding financial institutions, violations from which they say he received more than $5 million in gross receipts between September 2018 and August 2020. That charge carries a penalty of imprisonment for no less than 10 years.

Freeman has pleaded not guilty to all charges.

Five other New Hampshire residents, including two from Keene, were also arrested Tuesday in the federal probe. All five, many of whom face multiple charges, also pleaded not guilty before a U.S. magistrate judge that afternoon, according to court records.

Assistant U.S. Attorney Georgiana L. MacDonald argued in the hearing Friday that Freeman would pose a flight risk, if released before trial, pointing to the penalties he faces — which include forfeiting assets obtained via the currency-exchange operation — and alleging he has substantial financial resources.

MacDonald said the FBI seized $178,000 from a safe in Freeman’s bedroom at 73-75 Leverett St. on Tuesday, which was among several properties in town that federal agents searched that day. She also told Johnstone, the magistrate judge, that Freeman has access to 28 Bitcoin — equivalent to approximately $1.6 million — and that he likely has other assets the government has not yet identified.

MacDonald claimed that Freeman misrepresented his wealth to probation officers after his arrest. She argued that his alleged financial assets and lack of candor with government officials “raises concerns about his willingness to abide by conditions of his release,” if granted.

Alleging that “hordes of cybercriminals” bought virtual currency from Freeman in an effort to avoid detection by banks and government regulators, MacDonald also said releasing him would enable scammers and fraudsters to again use his services.

Freeman’s Chichester-based attorney, Mark Sisti, noted, however, that probation officers did not ask Freeman to detail his virtual-currency holdings Tuesday and instead asked only how much money was in his “accounts.” Freeman knew federal agents were investigating his dealings, Sisti said, arguing that his client still chose not to flee.

MacDonald also said the FBI found 26 guns and thousands of rounds of ammunition in a room at 73-75 Leverett St. that is occupied by a different resident. Sisti responded that the guns do not belong to Freeman and said he does not pose any danger, noting that an FBI spokesperson told media outlets while agents were conducting searches Tuesday morning that there was no threat to public safety.

Sisti also said Freeman owns property in Keene, has connections to the area and did not resist arrest. He added that Freeman would be willing to accept release with certain restrictions on his electronic activities and cryptocurrency operations and would also be open to wearing a tracking device.

“He’s a perfect example of an individual who should be let go on … bail,” Sisti said.

During the hearing Friday, MacDonald also offered additional details — not included in the indictment Monday — about the currency-exchange operation prosecutors say he oversaw.

MacDonald said federal officials began investigating Freeman nearly five years ago after hearing that proceeds from scams were being deposited into bank accounts under his name and the names of organizations that appeared to be churches. In the indictment, prosecutors allege that the six defendants intended to sell virtual currency via bank accounts registered under their own names or those of “purported religious entities” like the Shire Free Church, the Crypto Church of NH, the Church of the Invisible Hand and the Reformed Satanic Church.

Calling Freeman a “sophisticated criminal,” she said the currency-exchange operation did not comply with know-your-customer regulations that require businesses to collect basic information about their clients. Investigators have identified people in a majority of states nationwide that used Freeman’s services, according to MacDonald.

MacDonald said Freeman also “profited mightily from his business,” charging a 10 percent commission on transactions online and at currency-exchange kiosks like Bitcoin ATMs. Cryptocurrency exchange operations typically charge 2-3 percent fees, she said.

MacDonald added that electronic records show Freeman knew scam artists used his service to avoid detection by banks and government officials.

“Freeman made sure that fraudsters knew they could use his service if they were willing to pay a premium,” she said.

Caleb Symons can be reached at 352-1234, extension 1420, or csymons@keenesentinel.com. Follow him on Twitter @CalebSymonsKS.