Former Coinbase CTO Loses Malaysia License After Alleged Israel Link Sparks Investigation

Malaysian authorities have revoked the business license of Network School, a technology community founded by former Coinbase CTO Balaji Srinivasan.

The decision followed scrutiny over alleged links to Israeli participants. However, local officials said they cancelled the license over business and premises violations.

The Iskandar Puteri City Council ordered NS0 Malaysia Sdn Bhd to stop all operations at Forest City from July 22. Officials said the company operated from two premises. One site did not have the required business license.

Meanwhile, inspectors found that the company carried out activities beyond those approved under its existing license. Authorities also found problems with its advertising signboard.

Network School is not shutting down; that’s fake news.We received two notices. The first tells us to change the text of a sign. The second says that our coworking site, which was created by joining two adjacent units, evidently has a valid license on the left hand side but not…

— Balaji (@balajis) July 17, 2026

Israeli Claims Trigger Investigation

The case began after pro-Palestinian activists raised concerns about possible Israeli participation at Network School.

Online posts alleged that Israeli entrepreneurs had entered Malaysia using passports issued by other countries. The claims also raised questions about the school’s admission process and its interest in Israel, politics and military technology.

However, Malaysian immigration officials later inspected 266 foreign residents from 40 countries.

They said everyone checked had valid travel documents. Authorities did not publicly confirm that any participant had entered Malaysia illegally as an Israeli national.

Malaysia does not recognise Israel and generally does not allow entry using Israeli passports. However, Israeli dual nationals may enter using valid passports from other countries if they meet Malaysian immigration rules.

Prime Minister Anwar Ibrahim said authorities would expel any Israeli national found breaking local laws.

Breaking News: The state of Johor has shut down @balajis' Network School.The only remaining Network School entity will be in Singapore, where it is incorporated.Congratulations, Singapore now you can have Balaji, the Network State, and the Network School. https://t.co/cKR15y2kws

— Asyraf (Bicara Krypto | Sentysis) 🇲🇾 (@BicaraKrypto) July 21, 2026

What is the Network School?

Network School opened in Forest City, Johor, in 2024.

Despite its name, Malaysia’s Higher Education Ministry said it was not a registered university or private education provider. Officials described it as a residential and co-working community for technology founders, investors and startup workers.

The project became known for promoting Srinivasan’s “network state” idea. The concept involves online communities building physical settlements and developing their own economic and governance systems.

The school offered accommodation, meals, workspaces, startup programmes and fitness activities. It attracted people from the crypto, technology and investment sectors.

I am pleased to announce that a memorandum of understanding has been signed between the Republic of Kazakhstan and Network School. Our new campus will become a haven for global techno-optimism, with expedited visas, streamlined redomiciliation, and active recruitment of talent. pic.twitter.com/R20i8UAYoc

— Balaji (@balajis) July 21, 2026

Srinivasan Rejects Allegations

Srinivasan denied the claims about Israeli links before the license was cancelled.

He said anonymous social media accounts had spread false allegations. He also warned that the investigation could damage Malaysia’s reputation among international technology investors.

According to Srinivasan, Network School had invested more than 100 million Malaysian ringgit in Forest City. He said the company had planned a further 500 million ringgit expansion.

The company placed those plans on hold during the investigation.

Srinivasan joined Coinbase in 2018 after the crypto exchange acquired Earn.com, where he served as chief executive.

Coinbase appointed him as its first CTO. His role focused on technology strategy, crypto advocacy and recruitment. He left the company in May 2019.

Malaysia and Israel’s Diplomatic Roadblocks 

Malaysia has a long-standing policy of refusing formal diplomatic relations with Israel and strongly supporting Palestinian statehood. Israeli passport holders are generally barred from entering without special permission, and Malaysian passports have historically excluded travel to Israel. 

The Gaza war intensified public pressure for boycotts and restrictions involving Israeli entities or companies accused of supporting Israel.

Malaysia warns any Israelis found in the country will be immediately deported——Malaysian Prime Minister Anwar Ibrahim said on Wednesday that authorities are investigating allegations that an Israeli national may have been involved in the activities of a private residential… pic.twitter.com/PyL28Ye5b4

— The Cradle (@TheCradleMedia) July 16, 2026

In 2024, 22 Malaysian civil-society organisations urged the government to block a consortium’s proposed privatisation of Malaysia Airports because one consortium member, Global Infrastructure Partners, was being acquired by BlackRock. 

Campaigners alleged that BlackRock had significant Israeli connections and investments.

The government did not cancel the airport transaction solely on that basis. Global Infrastructure Partners later said BlackRock would not participate in the deal.