Telegram says its chief executive Pavel Durov has "nothing to hide" after he was arrested in France, adding the charges against him are "absurd".
The billionaire founder of the encrypted messaging app was detained after his private jet landed at Le Bourget airport on the outskirts of Paris on Saturday.
News broadcasters BFMTV and TF1 have quoted unnamed sources as saying the Russian-born entrepreneur - who became a French citizen in 2021 - was the subject of a search warrant.
Both outlets suggest the investigation was focused on a lack of moderators on Telegram and potential criminal activity by users.
They said the warrant alleges his platform has been used for money laundering, drug trafficking and other offences, though French authorities are yet to comment.
In a statement on Sunday, Telegram said: "Telegram abides by EU laws, including the Digital Services Act - its moderation is within industry standards and constantly improving.
"Telegram's CEO Pavel Durov has nothing to hide and travels frequently in Europe.
"It is absurd to claim that a platform or its owner is responsible for abuse of that platform."
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Telegram is one of the most downloaded apps in the world, with close to one billion users.
It offers end-to-end encryption - effectively protecting data from being intercepted - and has a strong focus on privacy.
But these features have made it a popular place for criminal activity and it was recently exploited by far-right activists who sparked riots in the UK over the Southport stabbings.
Mr Durov, 39, left Russia in 2014 after losing control of his previous social media company Vkontakte (VK).
He refused to comply with government demands to shut down opposition groups on the platform and would not hand over data on Ukrainian protesters to security agencies.
He moved to Dubai in 2017 and became a French citizen in August 2021.
The Russian embassy in France has called for consular access to Mr Durov and demanded his rights be ensured, according to Russian state news agency TASS.
France has so far "avoided engagement" on the situation with Durov and Russian diplomats are in contact with his lawyer, the embassy said.