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 jail with a 5m euro 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 – was questioned about allegations his platform is being used to exchange child sexual abuse material, and by crime gangs for drug trafficking, fraud and money laundering.
It is also claimed that Telegram refused to share information or documents with investigators.
Telegram has responded by insisting 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 has caused outrage in Russia with paper planes – representing Telegram’s logo – being placed in Moscow in support of the billionaire.
Some government officials claim the arrest was politically motivated and proof of the West’s double standard on freedom of speech.
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”.
Read more on Sky News:
Scientists trying to track and tackle mpox spread
Mark Zuckerberg was ‘pressured’ to ‘censor’ content
Elon Musk’s riot comments trigger support for rival platform
Telegram, which says it has nearly a billion users worldwide, was founded by Durov after facing pressure from Russian authorities about another platform he launched.
He defied demands to restrict Russian opposition activists and hand over personal data on the popular social networking site VKontakte (VK).
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.