* Swiss investigating "a number of" initial coin offerings
* Probe into whether Swiss laws violated
* This includes anti-money laundering rules
* Second clamp-down by Swiss in less than two weeks (Recasts, adds industry reaction)
ZURICH, Sept 29 (Reuters) - Swiss financial watchdog FINMA has begun investigating a number of initial coin offerings (ICOs) for possible breaches of Swiss law, spelling greater regulatory oversight of some of the most prominent blockchain projects in "Crypto Valley".
The move puts Switzerland in line with authorities casting a sharper eye on the new crowdfunding method, which has let digital currency entrepreneurs raise millions quickly by creating and selling digital "tokens".
Wall Street's main regulator in July ruled ICOs should be subject to the same safeguards as traditional securities sales.
But it could spell uncertainty for existing projects in the hub which accounted for more than $600 million of a worldwide $2 billion in ICO funds raised this year.
It is the second crackdown in less than two weeks by FINMA as it grapples with the booming but opaque world of cryptocurrencies.
"FINMA has observed a marked increase in initial coin offerings conducted in Switzerland," it said on Friday, adding it was "looking into a number of different cases".
Switzerland does not have rules governing conduct specifically for ICOs. But depending on how an ICO is structured, some parts of the procedure may be covered by existing regulations, FINMA said.
Swiss ICOs have largely been run by foundations based in Zug, Switzerland's "Crypto Valley".
This month the Crypto Valley Association -- of which Thomson Reuters is a member -- issued a statement supporting ICO regulation and said it had begun working with its members on developing an ICO code of conduct.
President Oliver Bussmann said the association was unsurprised by FINMA's announcement.
"Bottom line, we welcome that the Swiss regulator is taking action and recognises the need for clear guidance and oversight, especially with regards to KYC (know-your-client) compliance, while also fostering innovation," he said.
Switzerland has hosted four of the six largest ICOs to date. These include a record-breaking "token gathering" by Tezos, which in July raised the equivalent of $230 million-$240 million in bitcoin and ether. Bancor Protocol, a Zug-based foundation enabling the creation of other cryptocurrencies, raised over $150 million in June.
While attracting several of the best teams in the industry, Switzerland has also become host to many startups "with less credible backgrounds", said SmartValor Chief Executive Olga Feldmeier, who hosted an ICO Summit in Zurich this month.
This month FINMA closed down what it said was the provider of a fake cryptocurrency and said it was investigating around a dozen other possible fraud cases.
The move came on the heels of Chinese authorities' ordering Beijing-based cryptocurrency exchanges to stop trading and immediately notify users of their closure.
Regulators and traditional banks are increasingly concerned about the risks of fraud and money laundering in the burgeoning online cryptocurrency underworld.
JPMorgan Chief Executive Jamie Dimon this month called bitcoin, the original and largest cryptocurrency with a market capitalisation near $70 billion, "a fraud" that will eventually "blow up".
ICOs have fuelled a rapid ascent in the value of all cryptocurrencies, from about $17 billion at the start of the year to a record high of close to $180 billion at the beginning of September.
(To see a Reuters SPECIAL REPORT: Chaos and hackers stalk investors on cryptocurrency exchanges, click on) (Additional reporting by Michael Shields; Editing by Susan Fenton)