Malaysia says it is investigating tech commune run by ex-Coinbase executive

STRAITS · 2026-07-14

Johor Chief Minister Onn Hafiz Ghazi called on authorities to probe allegations that the Network School hosted Israeli nationals who had entered the country on second passports from other nations. Malaysia is investigating a tech commune founded by ex-Coinbase CTO Balaji Srinivasan over claims it hosted Israeli nationals, which may violate immigration laws. The commune, called the Network School, is located on a man-made island in Johor’s Forest City and targets digital nomads and startup communities. Authorities will verify identities, travel documents, and compliance with local regulations, with strict action promised if laws are broken or national security is threatened. KUALA LUMPUR - Malaysia’s Home Affairs Ministry said on July 14 it was investigating a co-living community for “digital nomads” founded by former Coinbase chief technology officer and US investor Balaji Srinivasan, following claims it included Israelis in violation of immigration laws. Malaysia is a staunch supporter of the Palestinian cause and does not have diplomatic relations with Israel. The Immigration Department says that Israeli passport holders are barred from entering Malaysia. However, the country does not have laws preventing people with dual citizenship from travelling on non-Israeli passports. The Network School, founded by Srinivasan in 2024, is described on its website as a “frontier community of techno-optimists” aimed at “turning internet communities into physical startup societies”. Srinivasan has said the community was based on a man-made island “near Singapore”, and social media posts and press reports indicate that it is located in Forest City , a sprawling US$100 billion (S$129.31 billion) development on reclaimed land in Malaysia’s Johor state. The Network School did not immediately respond to a request for comment. Johor Chief Minister Onn Hafiz Ghazi on July 14 had called on authorities to probe allegations by social media users that the Network School hosted Israeli nationals who had entered the country on second passports from other nations. Johor state agencies would also re-examine the commune’s compliance with local regulations including licences, building use, and business activities, Onn Hafiz said in a post on X on July 14. The Home Affairs Ministry said in a statement the immigration department, police and related agencies were investigating the claims raised by Onn Hafiz. The investigation would seek among others to determine the identities and nationalities of individuals involved, the validity of the travel documents used, their purpose of entry into Malaysia, the ministry said. “If the investigation finds any violation of the law, misuse of immigration passes, provision of false information or any other offense that affects national security and interests, strict action will be taken without any compromise,” it said. REUTERS

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Malaysian authorities have launched an official investigation into a tech community operated by a former Coinbase executive. The probe aims to verify the organization's operational practices and legal compliance, raising concerns about transparency in the cryptocurrency industry. Investors should closely monitor the potential for increased regulatory risks for related companies depending on the investigation's outcome.

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Bitcoin — The investigation involving a former Coinbase executive has highlighted regulatory risks across the crypto industry, potentially dampening investor sentiment and increasing short-term volatility while undermining market trust.

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