Network School founder Balaji Srinivasan is seeking a memorandum of understanding with Malaysia after authorities probed his Forest City tech community over allegations it was hosting Israeli citizens using second passports.
Malaysia’s Home Affairs Ministry said Tuesday it was investigating Srinivasan’s start-up community in Johor following claims it included Israelis in violation of immigration laws. Initial checks found all 266 foreigners held valid documents.
Srinivasan said the agreement would give Network School legal certainty to continue investing in Malaysia. Without it, he said, the community could take its capital to countries that are more welcoming.
“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 highlights a tension faced by many crypto utopias, which aspire to build digital-native communities with their own institutions and economies, but still depend on conventional states for legal certainty.
Balaji, the former chief technology officer of Coinbase, launched his Network School in August 2024 in Johor’s Forest City, which is located about an hour from Singapore. It is marketed as a physical community of tech builders, creators and founders.
Srinivasan did not give the specifics of what a deal with Malaysia could include, but suggested it could be a memorandum of understanding or a modification of a special economic zone provision.
Related: Balaji calls for more ‘crypto tools’ for refugees amid Middle East tensions
“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 announced that he is putting any further investment in Malaysia, including a $122 million plan to expand its community, on hold until it gets “sufficient assurance” that such issues don’t recur.
Instagram post led to immigration probe
Claims that the Network School was harboring Israeli citizens have been traced back to a social media post on Friday from activist group “Malaysian Protest 4 Palestine,” which accused the school of becoming a “gathering place for Israeli entrepreneurs.”
Israeli passport holders are forbidden from entering Malaysia, a Muslim-majority country, without written permission from the Malaysian Ministry of Home Affairs, as Malaysia does not recognize Israel and does not have any diplomatic relations with the country.
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