The probe concerns crimes related to illicit transactions, child pornography, fraud and the refusal to communicate information to authorities, the prosecutor said in a statement.
Durov was arrested in France as part of an ongoing judicial investigation, and there was no political motive, French President Macron said earlier on Monday.
Macron's statement on X amounted to the first official confirmation of Durov's arrest, nearly two days since he was detained at Le Bourget airport outside Paris shortly after landing on a private jet from Azerbaijan.
The lack of official confirmation had led to speculation about the reasons behind his detention.
I have seen false information regarding France following the arrest of Pavel Durov.— Emmanuel Macron (@EmmanuelMacron) France is deeply committed to freedom of expression and communication, to innovation, and to the spirit of entrepreneurship. It will remain so. In a state governed by the rule of law,…August 26, 2024
Macron said he had read "false information here regarding France following the arrest of Pavel Durov," adding France was deeply committed to free speech.
"The arrest of the Telegram president on French territory took place as part of an ongoing judicial investigation," Macron wrote.
"This is in no way a political decision. It is up to the judges to decide."
A police spokesman told Reuters that Durov is under investigation by the cyber crime and fraud offices for failing to co-operate over cyber and financial crimes on Telegram, a popular messaging and social media app akin to WhatsApp.
He is still in custody, the spokesman said.
Reuters was unable to speak to any lawyer representing him.
Durov's arrest prompted criticism from X owner Elon Musk who said that free speech in Europe was under attack, and calls from Russia for French authorities to accord Durov his rights.
Tensions between France and Russia have been mounting for months, with French authorities accusing Russia of trying to destabilise it ahead of the Paris Olympics in response to its more hawkish stance on the Ukraine war - claims Russia denies.
Durov, a 39-year-old billionaire cast as "Russia's Mark Zuckerberg" has dual French and United Arab Emirates citizenship.
Estimated by Forbes to have a fortune of $US15.5 billion ($A22.9 billion), Durov said in April some governments had sought to pressure him but the app should remain a neutral platform and not a "player in geopolitics".
Telegram gave no details of the arrest but said the Dubai-based company abided by European Union laws and its moderation was "within industry standards and constantly improving".
"Telegram's CEO Pavel Durov has nothing to hide and travels frequently in Europe," Telegram said in a statement.
"It is absurd to claim that a platform or its owner are responsible for abuse of that platform."
Telegram was founded by Durov, who left Russia in 2014 after he refused to comply with demands to shut down opposition communities on his VK social media platform, which he has sold.
The encrypted application, with close to a billion users, is particularly influential in Russia, Ukraine and the republics of the former Soviet Union.
Durov, who was born in Soviet Leningrad and graduated from St Petersburg State University, lists his political views as "libertarian".
He obtained his French passport in 2021 through a special procedure for high-profile foreigners exempting them from the usual legal requirements, including having lived in the country for at least five years.
Russian state media reported that Durov also had the citizenships of Russia and of St Kitts and Nevis.
Reuters was unable to verify those reports.
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