The club has released a statement.
Chelsea have been accused of breaching Fifa rules regarding the signing of underage players. The club's signing of 25 foreign players under the age of 18 is being investigated.
If found guilty, Fifa has the power to impose sanctions – the main one being a transfer ban.
As you may remember, Barcelona, Real Madrid, and Atlético Madrid were investigated for the exact same thing. After being found guilty of illegally signing minors, the three clubs were given a two-window transfer ban. After a successful appeal to the Court of Court of Arbitration for Sport (CAS), Real only served one transfer window ban.
Fifa's investigation into the Premier League club started in September and it was originally conducted by Fifa’s Transfer Matching System (TMS).
The Guardian have reported that the signing of Bertrand Traoré, the Burkina Faso forward, was the first red flag that triggered football's governing body.
Traoré signed professional terms with Chelsea on 1 January 2014, the day the transfer window opened after his 18th birthday. However, pictures emerged of Traoré playing for the club against Arsenal in a “non-competitive” game on 23 October 2011. At the time of this match, he was 16.
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The Guardian state: "The rule states that clubs are not allowed to sign players under the age of 18 from other countries unless their parents have emigrated for reasons that are not connected to football or both the player and club are based within 50km of a national border."
In total, after investigating Chelsea's activity, Fifa discovered 25 cases that they felt warranted further investigations although some of these might be discarded.
Fifa have also requested further information from Chelsea and the Football Association.
It's reported that the investigation is still at an early stage but it's expected to develop.
A Chelsea spokesman said: “Chelsea FC complies with all Fifa statutes and regulations when recruiting players.”
