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Pavel Durov, the chief executive of Telegram, has been charged with allegedly allowing criminal activity on the messaging app.
French judges have barred Mr Durov from leaving France pending further investigation, but he has avoided being held in custody with a €5m bail.
The billionaire founder of the encrypted messaging and social media app was arrested in France on Saturday after his private jet landed at Le Bourget airport outside Paris.
The Russian-born entrepreneur - who became a French citizen in 2021 - is accused of operating a platform which is being used for child sexual abuse material and by organised crime gangs, for drug trafficking and fraud.
Read more: Who is Telegram founder Pavel Durov?
It is also claimed that Telegram refused to share information or documents with investigators.
Mr Durov faces preliminary charges which, under French law, mean magistrates have strong reason to believe a crime was committed but allow more time for further investigation.
But it might not necessarily lead to a trial.
Telegram has insisted it abides by EU laws and its moderation is "within industry standards and constantly improving".
Its statement added: "It is absurd to claim that a platform or its owner is responsible for abuse of that platform."
Mr Durov's arrest in France, and four days of questioning, has caused outrage in Russia.
Paper planes - representing Telegram's logo - being placed in Moscow in support of the billionaire.
Some government officials claim his detention was politically motivated and proof of the West's double standard on freedom of speech.
However, Kremlin critics have pointed out that, in 2018, Russian authorities tried to block the Telegram app but failed, withdrawing the ban in 2020.
Meanwhile in Iran, where Telegram is officially banned, but still widely used, the Islamic Republic's supreme leader, Ayatollah Ali Khamenei praised France for being "strict" against those who "violate your governance" of the internet.
It has also prompted controversial influencer Andrew Tate to compare himself to Telegram's CEO as he fights allegations of human trafficking in Romania, among other offences, which he denies.
But French President Emmanuel Macron has insisted that Mr Durov's arrest was not political, and posted on X that his country "is deeply committed" to freedom of expression.
He added that "freedoms are upheld within a legal framework, both on social media and in real life, to protect citizens and respect their fundamental rights".
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Telegram, which says it has nearly a billion users worldwide, was founded by Mr Durov after he faced pressure from Russian authorities about another platform he launched, VKontakte (VK).
He defied demands to restrict Russian opposition activists and hand over personal data linked to the popular social networking site.
Instead, he sold his stake in VK and left the country to focus on Telegram, which remains particularly influential in Russia, Ukraine and the republics of the former Soviet Union.
Telegram offers end-to-end encryption - effectively protecting data from being intercepted - and has a strong focus on privacy.
But while it is a critical source of information on Russia's war in Ukraine, it has also been used for criminal activity and recently by far-right activists who sparked riots in the UK over the Southport stabbings.
Western governments have often criticised Telegram for a lack of content moderation, which experts say opens up the messaging app for potential exploitation by criminal and extremist gangs.
In 2022, Germany issued fines of €5.1m (£3.7m) against Telegram for breaching laws which regulate large online platforms, including failing to establish a way of reporting illegal content.
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