The rocker, who has been dating long-term partner Shannon Tweed for over 20 years, reportedly made the tape while carrying out promotional duties as a spokesman for Frank's Energy Drink.
The video showing a man who appears to be Simmons has been posted on website Avn.com, which is selling the recording to those who wish to download the footage.
According to the site, the woman in the film is named only as a model called Elsa who is reported to work for the drinks company the star was hired to promote. She has since been identified as Traci Anna Koval
Gene Simmons' lawyers have reportedly started sending out cease and desist letters to those that have posted the now infamous tape.
The letter, sent to Valleywag.com, reads, in part, "The video in question was surreptitiously filmed without Mr. Simmons' knowledge by a woman named Traci Anna Koval.
"To the the extent that Ms. Koval ever claimed to have any interest in the video, which is both disputed and inconceivable, given its surreptitious filming, such rights were acquired by our client Allied Industry in 2003, pursuant to a written assignment and release agreement in which Ms. Koval assigned all of her interest in the video to Allied Industry, including the copyright, represented and warranted that no additional copies would be exploited or distributed and expressly consented to injunctive relief."
The video, which surfaced two days ago, shows Simmons wearing his T-shirt in various sexual positions on a bed.
In a recent blog entry, the Kiss rocker spoke out about the sex tape scandal, an called it "garbage".
Gene's statement, which hints at legal action, reads: "Hi everyone, "You may have heard or seen garbage that has sprung up from my past."
"Rest assured the proper legal team is looking at all ramifications and options. "And us? Shannon, Nick and Soph are happy and healthy ... All is well."
"And thank you all for the kind words of support."