The boy, 16, was among four people arrested when police cracked the alleged syndicate accused of threatening to publicly "out" men, who they lured through apps including Grindr, as paedophiles if they didn't hand over mobile phones or cash.

Police previously said some members of the group were linked to the suicide of one of the male victims of the scam in NSW last month.

The teen was charged with two counts of blackmail, as well as two drug offences. His older brother, 18, was also charged with blackmail in relation to the scam. None of the four accused have entered pleas.

Magistrate Lorraine Walker said the accused appeared to be driven by financial gain and "a perverted sense of morality", when he returned to the ACT Children's Court for a bail application on Monday.

The court heard he was responsible for collating dossiers on victims. These were handed to the men when they met up and included records of social media conversations and potential criminal offences the boys claimed had been committed.

There were also allegedly videos that showed the accused confronting victims and telling them the way to stop the information in the reports being revealed publicly was to hand over their mobile phones or go to an ATM and withdraw up to $1000.

First Constable Steven Luxmoore gave evidence the boy was a principal offender in four or five of the seven alleged blackmail incidents reported to police.

"If there was someone I was to say sat at the top of the pyramid in this investigation that would be the individual," he said.

First Constable Luxmoore said police found text and online messages exchanged with the man who died by suicide showed the boy had discussed meeting him at Mawson shops and was allegedly among a group who visited his house the night before he died.

The court heard the alleged victim's phone had been active after his death and the accused had advertised that same model of mobile phone for sale on Gumtree soon after.

First Constable Luxmoore said digital forensics experts were still examining mobile phones seized from the boy's home. Police believed there were additional victims and expected more charges would be laid.

He said police held serious concerns if the boy was released, given he knew many of the alleged victims' addresses, noting he visited the alleged victim's home the night before he suicided, and were concerned he could try to contact them.

The boy allegedly told friends he was "targeting paedos" as his father "may have experienced something similar when he was younger", the court heard.

First Constable Luxmoore said the boys' father was highly intoxicated when a police officer contacted him over those claims this month and twice told police his sons "had done nothing wrong" and implied "they were almost doing police's job".

"They were finding the 'paedos' for us and it was almost like they were doing a civic duty," First Constable Luxmoore said.

In arguing for the boy's release, his Legal Aid lawyer noted he had no prior criminal history and said if released he could live with his mother in the ACT, or move in with his father in Queensland, and abide by strict conditions.

Those options were opposed by prosecutor Todd Trotter, who said neither living situation was appropriate and the boy's significant role in the alleged syndicate meant he posed a clear risk of reoffending.

Magistrate Walker said the Crown case was strong and the accused's alleged offences displayed a level of sophistication that was "somewhat startling for a person of 16".

"The nature of the offending and the attitude to it seems to suggest to to me there would be a high likelihood of reoffending."

She also expressed serious concerns over the possible risks to victims' safety, noting the man's suicide and that one of the men targeted told police he felt angry and humiliated.

Ms Walker refused bail and the boy was remanded in custody. His matter returns to court on March 14.

ACT Policing launched an investigation into a series of blackmail incidents after the AIDS Action Council received reports men had been targeted by a group of young people on social media in recent months.