A warrant has been issued for the arrest of the 21-year-old and his Brazil Under-22 team-mate Andrey following an incident which allegedly took place during the Pan-Am Games tournament in July.
A Chelsea spokesman said: "We are aware of the reports." Chelsea made no further comment.
Reading are also aware of the reports after Toronto Police issued a media release on Thursday.
"The Toronto Police Service is alerting the public to a sexual assault investigation," it read.
"It is alleged that: - on Saturday, July 25, 2015, a 21-year-old woman, along with a friend, met two men in a nightclub in Toronto.
"The two men accompanied the women to one woman's residence
"Once inside the residence, the two men sexually assaulted one of the women.
"The two men have now been identified, and arrest warrants have been issued for Lucas Domingues Piazon, 21, and Andrey Da Silva Ventura, 22.
"They are both wanted for: 1
"Both men are from Brazil
They were in Canada as participants in the 2015 Pan-Am Games as members of the Brazilian Pan-American football (soccer) team."
The alleged incident happened on the same day Brazil clinched the bronze medal in the tournament, with Piazon scoring in a 3-1 win over Panama.
Piazon joined Chelsea in August 2011 and is contracted to the Barclays Premier League club until 2017
He travelled on the first team's 2013 pre-season tour to Asia after a short spell with Malaga towards the end of the 2012-13 campaign.
He spent the 2013-14 season at Vitesse Arnhem, the 2014-15 term at Eintracht Frankfurt, and is on a season-long loan at Reading
He has made eight appearances for the Royals so far this season
Andrey is a goalkeeper with Brazilian side Botafogo.
Source : PA