Malaysia shuts down Network School in Forest City

Malaysia has officially shut down Balaji Srinivasan’s Network School in Forest City, ordering the "digital nomad" community to cease all operations effective July 22 after revoking its business license. The authorities made the decision following a review of inspection reports and enforcement findings, clarifying that compliance checks revealed violations regardless of how long the facility had been operating.

Network School was launched in 2024 as a live-in commune for digital nomads and startups, with monthly rents ranging from $1,000 to $2,000. The project was situated in Forest City, a massive real estate development in Johor near Singapore that has faced scrutiny over its foreign ownership models and demographic composition. The shutdown follows heightened tensions after Malaysia’s Immigration Department inspected the site and verified documents for 266 foreign members, responding to online rumors that the facility was harboring Israelis or illegal migrants, which prompted calls for stricter due diligence on ownership and funding sources.

Undeterred by the Malaysian closure, Srinivasan announced that Network School has signed a memorandum of understanding with the Republic of Kazakhstan to establish a new campus. This new location promises expedited visas, streamlined redomiciliation processes, and active recruitment of global talent, effectively pivoting the project away from Southeast Asia.

Balaji Srinivasan, former Coinbase CTO and venture investor, is the author of The Network State, which proposes creating new, digitally-coordinated societies that gain territorial recognition. He previously supported Prospera, a special economic zone on the island of Roatan, Honduras, as a testbed for these ideas. In a landmark 8-hour conversation with Lex Fridman in 2022, he detailed his vision for decentralized governance, technology, and the future of human organization.

Balaji Srinivasan’s Network School experiment proves a brutal libertarian truth: you can’t build a free society inside a cage and expect the jailer to like it. By operating within a legal space with full compliance and KYC, he assumed that "writing the rules" or negotiating a special dispensation was possible, ignoring that the state retains the monopoly on defining legality and can revoke privileges at will.