Police arrested Ernest Henry Yardley, 33, at his parent's home in Gilmore on Tuesday.

Documents tendered in court say that earlier this year federal police received two reports from a US-based organisation, the National Centre for Missing and Exploited Children.

The reports were about information provided by Facebook and Instagram about child exploitation material being shared by users on their platforms.

One related to Australian Instagram user yardleyernie allegedly sending a video file to an unknown person, and the second to an Australian Facebook user ernest.yardley.12 allegedly requesting an image from another user.

On Tuesday, police searched Mr Yardley's Gilmore home and seized a mobile phone, an external hard drive, a tablet and a laptop after allegedly finding child exploitation images.

They also searched a caravan described as Mr Yardley's second bedroom and found a Micro SD card and adaptor, which also allegedly contained child exploitation material.

Mr Yardley denied knowledge of how the material came to be on his phone and suggested it could have been a Dropbox link or that he had been hacked.

A prosecutor in the ACT Magistrates Court opposed Mr Yardley's release on bail, citing a likelihood he would not appear in court and interfere with evidence.

Part of the prosecution's concern was that during the search Mr Yardley had on him a passport and several thousands of dollars in cash and had expressed existing plans to travel to America.

But a Legal Aid lawyer said bail conditions would mitigate the risks.

Magistrate Glenn Theakston agreed and freed Mr Yardley on bail on strict conditions including that he not be left alone in the house with any children.

His passport had already been seized by police but Mr Yardley is also banned from going near airports, as well as using any device that connects to the internet.

Mr Yardley is charged with five counts of possessing child exploitation material. He did not enter pleas.

He is next due in court on February 27.