Malaysian authorities launch immigration probe into Balaji Srinivasan’s Network School

Balaji Srinivasan’s experiment in building a real-world startup community just ran into the kind of problem you can’t debug. Malaysian authorities have opened a formal immigration investigation into the Network School, a co-living and co-working space for techno-optimists nestled in Forest City, Johor, after social media allegations that Israeli nationals were using second passports to enter a country that doesn’t recognize Israeli travel documents.

Johor Menteri Besar Datuk Onn Hafiz Ghazi directed federal agencies, including the Home Ministry, the Immigration Department, police, and customs, to verify the identities of participants and their compliance with local laws. The announcement came on July 14, and the scope of the probe extends well beyond passports.

What the Network School actually is

The Network School is the physical manifestation of Srinivasan’s “network state” thesis. The idea, broadly, is that digitally connected communities can form their own quasi-independent governance structures and economies.

Launched in 2024, the program offers three-month residential stints in Forest City for a membership fee starting at $1,500 per month. That covers accommodations, meals, and access to facilities. Notably, the school accepts cryptocurrency as payment.

Srinivasan himself is a former general partner at Andreessen Horowitz (a16z) and one of the louder voices in the Bitcoin community.

Forest City, the massive real estate development in Johor originally backed by Chinese developer Country Garden, was designed to be a gleaming smart city. The project has been dramatically underutilized for years, creating exactly the kind of cheap, available infrastructure that an experimental community like the Network School could move into.

The passport problem

Malaysia does not maintain diplomatic relations with Israel and does not permit entry to holders of Israeli passports. The allegations circulating on social media suggested that some Network School participants held Israeli citizenship but were entering Malaysia on second passports from other countries, effectively sidestepping the restriction.

Onn Hafiz Ghazi’s response was swift and public, calling on multiple federal agencies to get involved. As of the announcement, no confirmed violations have been reported. The investigation is ongoing, and outcomes remain uncertain.

Beyond immigration: licensing and land use

The probe doesn’t stop at passport checks. Johor’s government has also flagged potential concerns about the Network School’s licensing, land use, and whether it complies with education regulations.

The Network School positions itself as an educational and community experience, but it doesn’t operate like a traditional school or university. It doesn’t grant degrees and does not appear to hold the kind of accreditation that Malaysian education authorities typically require.

Forest City’s zoning and development approvals were designed for a residential and commercial mega-project, not necessarily for a rotating cast of international tech workers running a pseudo-educational commune.

What this means for crypto-adjacent ventures

The Network School sits firmly in the crypto-adjacent ecosystem. Its founder is one of the most prominent Bitcoin advocates alive. It accepts crypto payments. Its entire philosophical foundation, the network state concept, is built on ideas about decentralized governance that emerged directly from crypto culture.

Current media coverage of the investigation predominantly comes from Malaysian outlets, with minimal focus from the crypto sector. The investigation’s outcome—whether it results in a slap on the wrist, a shutdown, or something in between—will likely shape how aggressively similar projects are pursued across the region.

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