Crypto World
Balaji Network School Expands to Kazakhstan After Malaysia Setback
Balaji Srinivasan’s Network School is looking to plant a new campus in Kazakhstan after regulatory pressure in Malaysia forced its Johor operation to halt. The move comes via a memorandum of understanding (MoU) between Kazakhstan’s Ministry of Digital Development, Innovation and Aerospace Industry and Srinivasan, signaling a rapid attempt to preserve the project’s cross-border footprint.
The Kazakhstan agreement positions Network School for a fresh base following actions that disrupted its local operations in Johor. Kazakhstan has been actively courting technology and digital-industry activity, including plans for a Central Asia “crypto city” in Alatau—an environment that Network School appears eager to tap.
Key takeaways
- Network School signed an MoU in Kazakhstan, potentially creating its first local campus there.
- Malaysia’s Johor authorities revoked the business license of NSO Malaysia Sdn Bhd, the operator behind Network School’s Forest City-linked presence.
- Malaysia Digital status is under immediate review, since the operator’s Malaysia Digital recognition is tied to compliance with local and federal laws.
- Srinivasan says the Kazakhstan campus will focus on talent attraction, including expedited visas and streamlined redomiciliation.
Kazakhstan MoU offers a fallback for Network School’s expansion
According to a ministry statement, Kazakhstan’s Ministry of Digital Development, Innovation and Aerospace Industry signed an MoU with Balaji Srinivasan to establish the first Network School campus in the country. The memorandum was signed by Zhaslan Madiyev on behalf of the ministry and Srinivasan on the Network School side.
For the project, the timing matters. Network School’s Kazakhstan plan appears framed as continuity after setbacks in Malaysia. The article also notes that Kazakhstan has been positioning itself as an emerging technology hub, and references ambitions such as a Central Asia “crypto city” in Alatau—suggesting regulators and policymakers there may be more receptive to experiments that sit near the boundary between technology policy and digital-asset culture.
Srinivasan described the new campus as a place designed to accelerate onboarding for participants. In a post dated Tuesday on X, he said the campus would offer a “haven for global techno-optimism,” including expedited visas, streamlined redomiciliation, and active recruitment of talent.
Malaysia regulatory action escalates: license revocation and Malaysia Digital review
Network School’s Kazakhstan pivot follows multiple regulatory developments in Malaysia. On Tuesday, the Iskandar Puteri City Council (MBIP) revoked the business license of NSO Malaysia Sdn Bhd, which operates Network School. The revocation was linked to alleged breaches of licensing conditions and premises-use requirements.
The Malaysia Digital Economy Corporation (MDEC), which oversees the “Malaysia Digital” program, then announced immediate steps to revoke the operator’s Malaysia Digital status. Malaysia Digital recognition is granted to eligible technology and digital companies and, as described in the source coverage, can come with incentives such as tax benefits, flexibility around ownership, and the ability to employ local and foreign workers.
Crucially, the program also requires licensees to comply with local and federal laws. With NSO Malaysia’s license revoked, MDEC’s move indicates the regulator is treating the Malaysia Digital designation as contingent on continued lawful operations.
Johor politics and immigration scrutiny widen the dispute
Beyond the licensing issue, the dispute has also pulled in higher-level political attention. The source reports that Onn Hafiz Ghazi, Chief Minister of Johor, urged Malaysia’s federal authorities to continue investigating whether Network School violated immigration laws. He framed Johor as a “strategic entry point” due to the state’s proximity to Singapore, arguing that any weaknesses or misuse of the immigration system should be addressed promptly and firmly.
This matters for Network School because its model—bringing in global “digital nomads” and hosting a dense community of talent—depends on predictable pathways for visas, residency changes, and compliance. When immigration questions enter the picture, the risk is not only reputational; it can directly affect members’ ability to travel, work, or remain in the country.
The source also indicates that Srinivasan pushed back on reports that Network School was shutting down. On Friday, he denied the closures, saying the project had received two notices: one requiring a sign’s wording to be changed, and another related to a coworking setup created by joining two adjacent units. He said one side of that arrangement had a valid license while the other did not, and claimed the group had a remedial period to address both issues.
According to Srinivasan, members were otherwise unaffected during that remedial window. Cointelegraph reported that it reached out to Srinivasan and Network School for comment, but the article’s account focuses primarily on the regulatory steps already taken by the local council and MDEC.
What changes—and what remains uncertain—if Network School relocates
The Kazakhstan MoU suggests Network School wants to avoid a prolonged pause by securing an alternative operating base quickly. But an agreement is not the same as full operational clearance. Readers should view the MoU as a framework for collaboration and campus establishment, while awaiting more detailed information on licensing, immigration logistics, and the practical timeline for opening.
Still, the contrast between Malaysia and Kazakhstan is instructive. In Malaysia, the dispute moved from licensing conditions to a broader discussion involving Malaysia Digital compliance and immigration law scrutiny. In Kazakhstan, the present reporting centers on cooperation and talent-attraction features—expedited visas and streamlined redomiciliation—language that typically signals a focus on easing administrative friction.
For investors, builders, and community operators watching the “network state” concept, the underlying takeaway may be how regulatory pressure in one jurisdiction can accelerate relocation tactics. A community anchored in one place can gain momentum, but it is also exposed: local licensing, premises rules, and immigration enforcement can rapidly reshape operating reality. Network School’s next steps in Kazakhstan will therefore function as a real-world test of whether the administrative environment for techno-nomad hubs can be replicated across borders.
As the Kazakhstan campus planning progresses, the most important thing to watch is how the MoU translates into concrete permits and member onboarding on the ground—particularly on visas and local compliance. Until then, Network School’s situation remains a moving target shaped by how regulators interpret licensing, premises usage, and immigration obligations in each country.
Aztec has launched the alpha version of its v5 execution layer, introducing a programmable privacy framework that allows Ethereum applications to process both public and private state within the same layer-2 environment.
Summary
- Aztec has released the alpha version of its v5 execution layer, bringing programmable privacy to Ethereum through zero knowledge powered smart contracts.
- The new architecture processes private computations on user devices while verifying transactions on chain without exposing sensitive data.
- Aztec said the execution layer supports confidential decentralized applications with features designed to reduce front running and MEV risks.
Aztec Labs announced the alpha release of its v5 execution layer, describing it as a step toward making privacy-native smart contracts practical on Ethereum.
The new architecture allows developers to build decentralized applications that combine confidential user data with public blockchain state while relying on zero-knowledge proofs to verify transactions without exposing sensitive information.
Unlike Ethereum’s base layer, where every validator processes and stores transaction inputs, outputs, and execution data to reach consensus, Aztec’s execution layer moves private computation to the user’s device. Instead of revealing transaction details to the network, the system generates cryptographic proofs locally before submitting them for verification on-chain, reducing the amount of visible transaction data while preserving Ethereum’s security guarantees.
Client-side execution changes how private transactions are processed
At the center of the release is a client-side zero-knowledge execution engine integrated with Noir, Aztec’s domain-specific programming language for private smart contracts. Rather than executing confidential transactions across every network node like the Ethereum Virtual Machine, the system performs private computations on user hardware before generating recursive Succinct Non-Interactive Arguments of Knowledge, or SNARKs.
Those proofs allow the network to verify that state changes are valid without exposing plaintext inputs, transaction values, or account identities. According to Aztec Labs, the model cuts unnecessary data disclosure while maintaining mathematical guarantees that transactions have been executed correctly.
The architecture also introduces a hybrid state model designed to overcome one of the biggest engineering challenges facing privacy-focused blockchains. Purely private execution environments often struggle when multiple users attempt to update the same public state at the same time, creating state contention that limits interaction with shared decentralized finance infrastructure.
To address that limitation, Aztec separates private and public state management. Private assets are stored in UTXO-like note trees, while public data is maintained through key-value trees. During execution, private functions can generate deferred public function calls that are processed later within the same transaction lifecycle, allowing confidential and public operations to work together without sacrificing deterministic execution or creating race conditions.
The execution model is intended to support applications that require confidential computation while still interacting with Ethereum’s public ecosystem, including shared liquidity pools and other decentralized finance protocols.
Privacy model targets decentralized finance and enterprise applications
Beyond transaction privacy, the execution layer introduces features that could reduce several long-standing issues in blockchain execution.
According to Aztec Labs, transaction details remain hidden before state commitment, making it significantly harder for external observers to reorder pending transactions or exploit visible transaction data through Maximal Extractable Value strategies.
The architecture also provides building blocks for applications such as confidential order matching, private liquidity provisioning, and selective compliance systems that disclose only required information through viewing keys instead of exposing complete user records.
Those capabilities build on Aztec’s long-standing focus on programmable privacy rather than simple anonymous token transfers.
Speaking to crypto.news in April 2025, Aztec Labs co-founder and CEO Zac Williamson said blockchain privacy should go beyond hiding wallet addresses.
He described user privacy, confidential transaction data, and private smart contract execution as the three pillars needed for practical on-chain privacy, calling them “the holy grail of blockchain privacy.”
Williamson also argued that privacy should not be treated as a separate segment of the industry, saying, “all crypto will be private” as programmable privacy becomes part of mainstream blockchain applications.
Discussing compliance, Williamson said privacy preserving systems should rely on selective disclosure instead of complete anonymity. He pointed to ZKPassport as an example, explaining that users can tap an NFC enabled passport to generate a zero knowledge proof and choose “what information you want to disclose,” whether it is nationality, age, or other identity attributes.
He said the technology is “permissionless, it’s privacy preserving, and it ensures strong compliance,” adding that such systems are “a lot more powerful” than existing privacy solutions because they combine privacy with programmable compliance.
That vision expanded further in May 2026 when Aztec Labs acquired ZKPassport while committing to keep the passport verification platform open source. The acquisition brought the privacy-focused identity infrastructure directly into Aztec’s ecosystem, allowing developers to combine programmable privacy with zero-knowledge identity verification across Ethereum-compatible networks.
The technology had already been tested on Aztec’s network to help reduce Sybil attacks by allowing participants to prove they were unique individuals without revealing their identities. It was also used during the AZTEC token sale to perform sanctions screening while keeping participant information private.
Alpha release follows security incidents involving legacy products
The execution layer arrives shortly after Aztec Labs dealt with security issues involving products that had already been retired.
Earlier this month, Aztec Labs disclosed that it was investigating a potential exploit involving a deprecated payments product launched in 2021 after roughly $2 million was transferred from an immutable smart contract. The company said the affected system had been discontinued in 2022 and operated without administrator keys, preventing the team from pausing or upgrading the contract.
Separately, another deprecated product, Aztec Connect, lost approximately $2.1 million after attackers exploited an old immutable RollupProcessorV3 contract. Aztec Labs said the incidents were unrelated to the active Aztec network.
The Aztec Foundation also stated that neither exploit had any connection to the current network or the AZTEC ERC-20 token, emphasizing that the affected contracts belonged to legacy infrastructure that had remained live on Ethereum after the products were sunset.
Balaji Srinivasan’s Network School is looking to expand into Kazakhstan after regulators moved against its Malaysia operations, according to a memorandum of understanding announced by Kazakhstan’s Ministry of Digital Development, Innovation and Aerospace Industry. The deal, signed with minister Zhaslan Madiyev, aims to establish what the ministry describes as the first Network School campus in the country.
The Kazakhstan announcement comes as Network School’s Forest City-area presence faces escalating regulatory pressure. Malaysia’s local authorities revoked the business license of the operator, NSO Malaysia Sdn Bhd, prompting the Malaysia Digital Economy Corporation (MDEC) to begin steps to remove the company’s Malaysia Digital status. The situation raises the question of how easily Network School can restart and maintain immigration- and incentives-related arrangements across borders.
Key takeaways
- Kazakhstan’s ministry says it has signed an MoU with Balaji Srinivasan to create the first Network School campus in the country.
- Malaysia’s Iskandar Puteri City Council revoked NSO Malaysia Sdn Bhd’s business license over alleged licensing and premises-use breaches.
- MDEC says it is taking immediate steps to revoke NSO Malaysia’s Malaysia Digital status, which comes with benefits such as tax incentives and employment flexibility.
- Local officials in Johor have urged federal authorities to keep investigating whether Network School violated immigration laws.
- Srinivasan has framed the developments as consistent with the “network state” concept, while also saying Malaysia issues are being addressed through a remedial process.
Kazakhstan MoU opens a new front for Network School
In a statement from Kazakhstan’s Ministry of Digital Development, Innovation and Aerospace Industry, the government said an MoU was signed with Zhaslan Madiyev and Network School founder Balaji Srinivasan to establish a campus in Kazakhstan. While the document signals a strategic expansion, details of implementation—such as timeline, campus location, and regulatory steps—were not included in the provided reporting.
Network School’s Kazakhstan pivot matters for prospective residents and investors because campus operations are closely tied to host-country regulatory conditions, especially around visas, employment rules, and corporate status benefits. Srinivasan has previously described Network School as a community built around attracting globally distributed talent and capital, and the Kazakhstan proposal positions the group to potentially preserve momentum rather than waiting for a resolution in Malaysia.
Kazakhstan has also been positioning itself as a technology hub, including plans connected to a “crypto city” in Alatau, as referenced in the source material. Against that backdrop, Network School’s presence could be marketed as part of a broader attempt to draw innovation-driven communities and companies to the region.
Malaysia: revoked license and a threat to Malaysia Digital status
Malaysia’s regulatory actions began after the Iskandar Puteri City Council (MBIP) revoked the business license of NSO Malaysia Sdn Bhd, the entity operating the Network School’s Johor-area campus. MBIP cited alleged breaches of licensing conditions and requirements related to how premises were used, according to a report linked in the source material from mediadigitaljohor.gov.my.
Following the license revocation, MDEC announced it was taking immediate steps to revoke NSO Malaysia’s Malaysia Digital status. The Malaysia Digital program recognizes qualified technology and digital companies and is described in the source material as offering incentives such as tax advantages, ownership flexibility, and permission to employ both local and foreign workers—benefits that can be critical for international communities that rely on a steady inflow of talent.
MDEC’s stated rationale is that Malaysia Digital status requires companies to comply with local and federal laws. Removing that status could complicate Network School’s ability to operate smoothly if the campus depends on the program’s employment and incentives framework.
Johor officials push for immigration-law scrutiny
The stakes extend beyond corporate licensing. The source material says Johor Chief Minister Onn Hafiz Ghazi urged Malaysia’s federal authorities to continue investigating whether Network School violated immigration laws. He characterized Johor as a “strategic entry point” because the state borders Singapore and therefore argued that any weaknesses or abuse of the immigration system should be addressed promptly and firmly.
That emphasis highlights a common tension for border-adjacent technology hubs: even when a concept has strong global appeal, enforcement actions tied to immigration compliance can quickly affect day-to-day operations, staffing, and residency arrangements for community members.
Earlier coverage referenced in the source material indicates that scrutiny has been ongoing, including questions about how the campus fits within existing legal frameworks. The current license revocation and the potential loss of Malaysia Digital status suggest authorities are not treating the matter as purely procedural.
Srinivasan denies shutdown claims and points to remediation
As the regulatory situation unfolded, Srinivasan denied reports that Network School was shutting down. According to the linked social media statement in the source material, he said Network School had received two notices: one reportedly requiring “change the text of a sign,” and another related to a coworking setup formed by combining two adjacent units, where one side had a valid license but the other did not.
Srinivasan said the issues fell within a remedial period and that the organization would remediate them, adding that its members were otherwise unaffected. Cointelegraph also notes that it reached out to Srinivasan and Network School for comment, but the provided text does not include any additional responses beyond the denial and remediation framing.
Interpreting these statements alongside the MBIP and MDEC actions reveals an important asymmetry: public guidance from local authorities and program administrators may move faster than a company’s internal remediation plan. In practical terms, even if a remedial path exists on paper, the uncertainty can still disrupt hiring, occupancy, and community planning—especially for international residents who rely on predictable compliance timelines.
Meanwhile, Dragonfly Capital managing partner Haseeb Qureshi, quoted in the source material, linked the “Malaysia drama” to the broader “network state” argument. He suggested that the outcome could be used to negotiate new arrangements with other jurisdictions—an interpretation Srinivasan appears to be leaning into as the Kazakhstan MoU emerges.
What to watch next for Network School
Readers should focus on two tracks as the story develops: whether MDEC’s Malaysia Digital revocation proceeds and how quickly Malaysia’s immigration inquiries translate into enforceable outcomes, and—on the other side—how Kazakhstan operationalizes the MoU into concrete regulatory approvals for a Network School campus. Until those details are clear, Network School’s ability to retain its community and recruitment momentum will likely depend on jurisdiction-by-jurisdiction compliance rather than a single global brand narrative.
The Digital Chamber sued the Illinois Department of Revenue on Tuesday, asking a Sangamon County court to strike down the state’s new Digital Asset Tax Act before it takes effect.
The trade group represents more than 250 blockchain firms. It argues the 0.2% levy unfairly singles out digital assets based on the technology used to record ownership.
Inside Illinois’ Digital Asset Tax Act
Illinois enacted the Digital Asset Tax Act as Article 3 of Public Act 104-0468. The measure sets a 0.2% tax on the exchange, transfer, or storage of a customer’s digital asset.
Brokers must also register with the Department of Revenue. Violating the Illinois statute exposes them to Class 3 felony charges. The tax takes effect January 1, 2027.
Governor JB Pritzker signed Senate Bill 3019 into law in June. It drew heavy backlash from the crypto industry at the time, and the courts are now involved.
Follow us on X to get the latest news as it happens
Illinois Crypto Tax Faces Legal Challenge Months Before Launch
The Digital Chamber’s lawsuit raises six claims under state and federal law. It argues that the tax treats identical property differently based only on how ownership is recorded.
“Put simply, this tax discriminates against people who transact in digital assets,” the group said.
A tokenized Treasury and a book-entry Treasury carry the same rights, the suit says. However, only the blockchain version is subject to tax. The filing compares the setup to taxing one email system but not another.
The group also warns that the definition could stretch far beyond crypto. It says future state taxes could reach AI-enabled settlement systems and cloud-based payment networks.
“Taxes should be carefully considered, not only for the revenue they produce but for the fairness of those being taxed. That was not the case here, as the provision slipped into legislation the night before the bill’s final consideration,” CEO Cody Carbone said.
The suit asks the court to declare the Act void and block enforcement. A repeal bill, House Bill 5798, remains pending in the legislature.
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The post Digital Chamber Sues Illinois Over 0.2% Crypto Tax Law appeared first on BeInCrypto.
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