Balaji Seeks Agreement With Malaysia Amid Network School Investigation

“If we are not welcome, plenty of other countries would be willing to welcome us,” Network School founder Balaji Srinivasan said in a message addressed to the Malaysian prime minister.

Network School founder Balaji Srinivasan is pursuing a memorandum of understanding with Malaysia after authorities launched an investigation into his Forest City tech community over allegations that it was hosting Israeli citizens traveling on second passports.

Malaysia’s Home Affairs Ministry said on Tuesday that it had opened an investigation into Srinivasan’s startup community in Johor after allegations surfaced that Israelis were residing there in breach of immigration laws. Initial inspections found that all 266 foreign residents possessed valid travel and immigration documents.

Srinivasan said the proposed agreement would provide Network School with the legal certainty needed to continue investing in Malaysia. He added that, without such assurances, the community could shift its capital and future investments to countries offering a more welcoming environment.

“I would like to have a document stating not only that technology is welcome in principle, but that we are personally welcome as well,” Srinivasan said in a video message addressed to Malaysian Prime Minister Anwar Ibrahim on Thursday.

The episode underscores the challenge facing many crypto utopian projects, which aim to create digitally native communities with their own institutions and economies while still relying on traditional governments for legal recognition and regulatory certainty.

Balaji Srinivasan, the former chief technology officer of Coinbase, launched Network School in August 2024 in Johor’s Forest City, located about an hour from Singapore. The project is marketed as a physical community designed for technology builders, founders, and creators.

Srinivasan did not outline the specific terms of a potential agreement with Malaysia but suggested it could take the form of a memorandum of understanding or an amendment to an existing special economic zone provision.

“If not, then we will readily go somewhere else because I don’t want to be where we’re not welcome,” he said.

Srinivasan also said he is pausing any additional investment in Malaysia, including a planned $122 million expansion of the community, until he receives “sufficient assurance” that similar issues will not arise again.

Instagram Post Reportedly Triggered Immigration Investigation#

Allegations that Network School was sheltering Israeli citizens were traced to a social media post published Friday by activist group “Malaysian Protest 4 Palestine,” which claimed the community had become a “gathering place for Israeli entrepreneurs.”

Israeli passport holders are prohibited from entering Malaysia, a Muslim-majority nation, unless they obtain written approval from the Malaysian Ministry of Home Affairs. Malaysia does not recognize Israel and maintains no diplomatic relations with the country.