Malaysian authorities ordered Network School, a "digital nomad" community in Forest City founded by U.S. investor and former Coinbase chief technology officer Balaji Srinivasan, to cease all operations effective July 22 after revoking its business license.

The Iskandar Puteri City Council made the decision following a review of inspection reports, enforcement findings and representations submitted by the company, Johor Chief Minister Onn Hafiz Ghazi said in a statement shared on X Tuesday.

"Enforcement action can only be taken after complaints and information are verified, inspections are conducted, non-compliance is identified and legal processes are completed," the statement read. "The duration of a premise's operation does not mean all its activities are always in compliance with licence conditions."

The order comes days after Malaysia’s Immigration Department said inspections at Network School found 266 foreign members had valid travel documents, following online claims that the facility was hosting Israelis in violation of local laws. The department said further compliance checks were ongoing.

Srinivasan later said the reports that the school was shutting down were "fake news," adding that the organization had received two notices related to licensing issues and would address them. He said the first notice involved changing the wording on a sign, while the second concerned the licensing of a coworking site created by joining two adjacent units.

Srinivasan also criticized the immigration inspection, saying anonymous social media claims about the school harboring illegal migrants had prompted authorities to visit the site and check passports, including those belonging to dual passport holders. He said the checks found their documents to be in order.

In its statement, the Johor state government urged the Ministry of Home Affairs, the Malaysian Immigration Department, the Royal Malaysia Police and relevant security agencies to continue investigating any potential misuse of second passports, false declarations of identity, violations of entry conditions or other offenses under Malaysian law.

The Johor government also called on relevant agencies to tighten "due diligence" procedures, including background checks, ownership verification, funding sources, operational structures and representations made by companies or organizations seeking to operate in the state.

Srinivasan launched Network School in August 2024 as a live-in digital nomad and startup commune, describing it in a social media post at the time as a "beautiful island near Singapore" where he was building a community focused on "learn, burn, earn and fun." This included continuous education, physical fitness, career development and community building. 

Monthly rent was set at $1,000 with roommates or $2,000 solo.