Malaysia’s Johor state government has revoked the business license of Network School, a residential learning community founded by former Coinbase CTO Balaji Srinivasan, and ordered it to cease all operations in Forest City effective July 22, 2026. The decision, announced by Johor Chief Minister Onn Hafiz Ghazi, came after inspections and enforcement findings that reportedly uncovered regulatory breaches, unverified licensing conditions, and complaints about the facility.
The crackdown was sparked in part by an investigation into allegations that Israeli nationals were present at the school, a sensitive matter given Malaysia’s lack of diplomatic ties with Israel and strict entry policies. However, Malaysia’s Immigration Department confirmed that all 266 foreign members inspected held valid travel documents, creating a disconnect between the initial allegations and the documented facts. Nevertheless, state authorities have ordered further probes by the Ministry of Home Affairs, police, and immigration agencies into potential misuse of second passports, identity declarations, and immigration violations.
Balaji Srinivasan pushed back against reports that the school had already shut down, describing the issues as administrative licensing disputes. He said one notice involved updating the signage, while a second required licensing for a coworking space formed by merging two commercial units. Srinivasan also criticized the immigration raid, arguing it was triggered by anonymous social media claims and that officers confirmed all passports were valid.
The closure marks a significant regulatory setback for Srinivasan’s offline experiment, which charged residents $1,000–$2,000 per month to live, learn, and build startups near Singapore. The incident highlights the friction between crypto’s borderless ethos and the rigid sovereignty of physical jurisdictions, especially as other jurisdictions court crypto founders with friendlier licensing. Despite the shutdown, broader crypto infrastructure continues to expand: real-world asset tokenization has surpassed $20 billion, and established chains like Ethereum and BNB Chain remain leaders in developer activity, showing that the sector’s institutional and technical layers are maturing even as individual high-profile projects face blowback.
