A fraud case against Peter Foster is on the cusp of being withdrawn due to “jurisdictional issues”, as the infamous conman is granted bail.

On Friday, the NSW Director of Public Prosecutions reversed its opposition to the 58-year-old being released, seven months after his dramatic arrest on a Far North Queensland beach.

He was extradited to NSW and charged over accusations he rorted about $2 million in bitcoin through an Asia-based online sports trading operation.

Mr Foster’s barrister, Philip Strickland SC, told Central Local Court there were “real issues of jurisdiction” in the case.

The DPP said there had also been “consideration of the matter by the director” and the case was adjourned for four weeks for further negotiations.

But Ken Gamble, the chairman of international investigation firm IFW Global, which worked on the case, told the ABC Mr Foster’s alleged victim has been informed charges would be withdrawn.

“There’s no prospect of him being convicted of these charges in NSW,” he said.

“They’re going to withdraw the charges – they have to.”

Mr Gamble said the problems were linked to the flow of bitcoin involved, which was allegedly passed through the Independent Reserve in Sydney before being withdrawn in Queensland.

“It’s pretty disappointing,” Mr Gamble said.

Mr Foster appeared via video link from Parklea Correctional Centre and listened as strict bail conditions were read out.

They include surrendering his passport, not having internet access, not possessing a phone and a $180,000 security deposit.

He will also essentially be under house arrest and allowed to leave his Dover Heights address only for medical emergencies, daily reporting to police and for legal meetings.

“Mr Foster, I say this to everyone, if you breach these bail conditions you may not get bail again,” Magistrate Margaret Quinn said.

“I understand,” Mr Foster said.

Outside court, a member of Mr Foster’s legal team wouldn’t comment on whether the charges will be dropped.

The prosecutor told the court the matter would be addressed “one way or another” at the next mention in April.

-ABC