After a career of three decades, Mr Seck is one of Senegal's biggest stars.
His lawyers say he was the victim of a swindle and the money was paid to him by a producer as an advance for an upcoming tour.
A counterfeiting machine was allegedly found at the home of another man arrested with Mr Seck.
Both men were charged with circulating forged foreign currency, money laundering and conspiracy.
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The BBC's Laeila Adjovi in Dakar says after appearing in court on Tuesday, Mr Seck spent the night in Dakar central prison.
The singer was arrested and taken into custody on 27 May following an investigation into large transactions in foreign currencies, according to local media.
In court, he complained that he had been cheated of 85 million CFA francs ($144,000; Â£90,000) by one of the suspects of the investigation, according to the AFP news agency.
According to the local press, if he is convicted on all charges, 60-year-old Thione Seck could face a life sentence.
Mr Seck started out in Senegalese bands including Star Band and Orchestra Baobab, before becoming the lead singer of the band Raam Daan.
The BBC's Abdourahmane Dia in Dakar says Mr Seck's best known songs are Jongoma and Momy.
The star owns one of Dakar's best known night clubs, Penc Mi, where he and his son Wally Seck regularly perform, our correspondent says.
Senegalese singer Thione Seck has been charged with money laundering after fake banknotes worth millions of euros and dollars were found in his house.