Balaji's Network School pauses $122M Malaysia bet, courts Anwar for a formal "please stay" memo 🏫

Network School founder Balaji Srinivasan is asking the Malaysian government for a formal memorandum of understanding after authorities in Johor probed his Forest City tech community over allegations that it was hosting Israeli citizens using second passports. Malaysia's Home Affairs Ministry said Tuesday it was investigating Srinivasan's start-up community following claims it included Israelis in violation of immigration laws. Initial checks found all 266 foreigners at the site held valid documents.

Srinivasan said the agreement would give Network School legal certainty to keep investing in Malaysia. Without it, he warned, the community could move its capital to a more welcoming jurisdiction. "I'd like to have a document which says not just abstractly that tech is welcome … but rather that we're personally welcome," Srinivasan said in a video directed at Malaysian Prime Minister Anwar Ibrahim on Thursday. The episode underscores the recurring tension between crypto-aligned communities that build their own internal institutions and the conventional states they still rely on for legal standing.

Srinivasan, the former chief technology officer of Coinbase, launched Network School in August 2024 in Forest City, roughly an hour from Singapore. It is marketed as a physical community for tech builders, creators and founders. He has suspended a previously announced $122 million expansion plan in Malaysia pending what he called "sufficient assurance" that such issues will not recur, and indicated Network School will relocate operations if no accord is reached.

The immigration inquiry has been linked to a Friday social media post by activist group "Malaysian Protest 4 Palestine," which accused the school of becoming a "gathering place for Israeli entrepreneurs." Israeli passport holders are barred from entering Malaysia, a Muslim-majority country, without written permission from the Home Affairs Ministry, as Malaysia does not recognize Israel and maintains no diplomatic relations with it. Srinivasan did not disclose specific terms for any deal but suggested an MOU or a revision to special economic zone rules.