Malaysia shuts Srinivasan's Network School over licensing
Malaysian authorities ordered the closure of Balaji Srinivasan’s Network School, signaling tighter regulatory scrutiny on foreign funding and operations of digital nomad enclaves.
Malaysian authorities have ordered Network School, a digital nomad community founded by former Coinbase chief technology officer Balaji Srinivasan, to cease operations effective July 22. The Iskandar Puteri City Council revoked the project’s business license following a review of inspection reports and enforcement findings, according to Johor Chief Minister Onn Hafiz Ghazi.
The closure contradicts Srinivasan’s recent public statements. Just days before the revocation, he dismissed reports of a shutdown as "fake news," claiming the organization had received only two minor notices regarding sign wording and the licensing of a joined coworking space.
The regulatory crackdown follows heightened scrutiny from Malaysia’s Immigration Department. Authorities inspected the facility after anonymous online claims alleged the site was hosting Israelis in violation of local laws. Srinivasan criticized the inspection as a reaction to unfounded social media rumors, noting that passport checks found documents to be in order.
For market professionals, the shutdown illustrates the friction between borderless crypto communities and rigid local regulatory frameworks. Srinivasan launched the Forest City commune in August 2024 as a live-in startup enclave, describing it as a place for "learn, burn, earn and fun." The model charged $1,000 monthly for shared rooms or $2,000 for solo accommodations.
This business structure relies on attracting foreign capital and talent to specific geographic hubs, making it highly vulnerable to local enforcement. The Johor government warned that "the duration of a premise's operation does not mean all its activities are always in compliance with licence conditions." It called on security agencies to enforce stricter due diligence on foreign organizations.
Future ventures will now face deep background checks, ownership verification, and scrutiny of funding sources. The state government also demanded tighter reviews of operational structures and representations made by companies seeking to operate in Johor.
