Malaysia's Immigration Check on a Tech Commune Puts a $122 Million Investment on Ice
On July 14, Malaysian immigration officers inspected Forest City, the Johor mega-development that hosts Network School, the internet-native community founded in October 2024 by Balaji Srinivasan, a former Coinbase CTO and general partner at a16z. Officers checked passports belonging to 266 foreign residents across 40 countries after a social-media account alleged the compound was harboring undocumented Israeli nationals; by July 15, authorities confirmed publicly that every document checked was in order, according to The Star and The Rakyat Post.
Srinivasan responded by pausing a planned $122 million (RM500 million) expansion and requesting a meeting with Prime Minister Anwar Ibrahim's office to negotiate a memorandum of understanding committing both sides to respecting local law and the community's status. "We aren't asking for any money — just a meeting, to help restore confidence in Malaysia as an investable jurisdiction," he said, adding the community could relocate capital elsewhere if it doesn't feel welcome. Anwar had separately warned that any Israeli nationals found on-site — a country Malaysia does not recognise diplomatically — would be "deported immediately," a statement made before the investigation's outcome was confirmed.
SBI Completes Its Coinhako Buyout, a Day After a Tokenization Tie-Up With Ondo Finance
SBI Holdings closed its acquisition of a majority stake in Coinhako, the Singapore-based crypto platform, on July 16 through subsidiary SBI Ventures Asset Pte. Ltd., after receiving approval from the Monetary Authority of Singapore. Coinhako operates under a Major Payment Institution licence from MAS. The deal folds Coinhako into a Japanese group that already serves more than 14 million users and holds $308 billion in assets under custody globally, according to CoinDesk and Bitcoin Magazine.
The acquisition landed a day after SBI announced a partnership with Ondo Finance — which controls close to 60% of the global tokenized-equity market — to tokenize Japanese equities and other real-world assets, settled using SBI's yen-denominated stablecoin JPYSC. JPYSC cannot currently be withdrawn to external wallets or used on public blockchains; it is confined to accounts within SBI VC Trade. Chairman Yoshitaka Kitao described the combined moves as building "a global corridor for digital assets by connecting exchanges around the world."
Wahed Opens Malaysia's First Fractional Real Estate Platform to the Public From RM500
Wahed X Sdn Bhd, one of six participants in the Securities Commission Malaysia's inaugural Regulatory Sandbox (operational since March 2026), opened its Shariah-compliant fractional real estate platform to the public on July 17, moving beyond a closed pilot. The pilot itself — a single Johor Bahru property — had raised RM1.028 million from 928 investors in six days, an average commitment of roughly RM1,100 each, according to The Iskandarian and EdgeProp.my.
The public platform lets Malaysians invest in individual residential properties from RM500 without a mortgage, earning returns through quarterly rental income over an estimated five-year holding period plus any capital appreciation at sale. Wahed, an Islamic fintech platform headquartered in Abu Dhabi with more than $2 billion in assets across its global entities, has run 20 similar deals in the UK, raising £7.2 million, and five in the US, raising $2.2 million.
Eyes on the Day Ahead
Prime Minister Anwar Ibrahim's office has yet to respond publicly to Srinivasan's request for a meeting; how quickly — and whether — it grants one will signal whether the RM500 million pause becomes a brief standoff or a longer-running dispute over Forest City's status within the broader Johor-Singapore SEZ push. Malaysia's AI Governance Bill public consultation also remains open through July 31, still the nearest hard regulatory deadline in the region for AI deployers and infrastructure operators.
Layer 7 Ventures is a research-driven firm focused on AI and cryptocurrency in Southeast Asia. Views expressed are those of the firm and do not constitute investment advice.
