Kim Dotcom, the founder of file-sharing website Megaupload.com wanted in the US on copyright piracy charges, has been granted bail and released by a New Zealand court, but will remain under effective house arrest and banned from using internet.
Nevin Dawson, the judge on Wednesday, said that bail could be awarded, given that there was no new evidence that Dotcom had undisclosed funds he could use to flee the country.
He said prosecutors had been unable to find any new funds or assets that had not already been seized, and that their arguments that he was a wealthy man was not sufficient reason to hold him, pending an extradition hearing set for August 20.
Prosecutors said the formal extradition application had not yet been received but was expected by early March.
US authorities allege Dotcom, who changed his name from Kim Schmitz, facilitated millions of illegal downloads through his company. He has been in custody since his arrest on January 20.
Dotcom obtained bail on his second attempt, after the judge said a review of the facts and Dotcom's circumstances showed he was less of a risk of fleeing than before.
His three co-accused were also bailed until the August hearing of the US extradition request.
A US justice department spokeswoman declined immediate comment on the bail ruling.
"I'm relieved to go home and see my three little kids and my pregnant wife," Dotcom, 38, said after the ruling.
He vowed to fight the eventual extradition hearing on US charges of copyright piracy, racketeering and money-laundering.
Under the bail conditions, Dotcom, who kept a private helicopter as part of his lavish lifestyle, must live in a small house near the mansion he had rented and wear an electronic tag.
He will be restricted in how far he can travel. The judge also banned helicopters from flying to or landing on the property.
Last week, a US grand jury added more charges against Megaupload.com and its executives.
US authorities claim Megaupload.com cost filmmakers and songwriters up to half a billion dollars in lost copyright revenue by distributing copyrighted content without authorisation.
His lawyers say the company simply offered online storage and that he strenuously denies the US charges.
Dotcom was arrested along with his aides last month after dozens of armed police raided his country estate at the request of the US Federal Bureau of Investigation.
He is a citizen of both Germany and Finland and was granted New Zealand residency in 2010. He has also lived in Hong Kong, where the Megaupload.com company is registered.