The Hidden Cost of Political Games: How Entrepreneurs Get Caught in the Crossfire

By: Elena Obukhova

For over a decade, I have built businesses, expanded globally, and navigated the complexities of financial systems. Yet, despite my experience, I found myself unbanked, sanctioned, and discriminated against by financial institutions.

Caught In The Crossfire

One of my companies was sanctioned by the U.S. government following the Russia-Ukraine war. As sanctions rolled out, many Russian citizens faced sudden restrictions—even those with no direct ties to the country’s politics or economy. In our case, the issue was as ridiculous as my co-founder having a Russian address on incorporation documents.

At the same time, my other company’s business account in Hong Kong was shut down, and the bank was refusing to send my money out unless I have another bank account for the same exact entity.

Beyond that, subscriptions, domains, servers, among other platforms that had ever listed a Russian address or nationality started canceling our accounts without warning. While most were eventually recoverable, it took days of back-and-forth, additional paperwork, and constant disruptions—time that should have been spent growing the business instead of fighting bureaucratic nonsense.

From email we received:

…The Division of Corporations has placed a block/restriction on (company Name hidden) in our system.  Section 1(a)(ii) of Executive Order 14071, prohibits the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a U.S. person, wherever located, of accounting, trust and corporate formation, or management consulting services to any person located in the Russian Federation. The Division of Corporations provides Corporate Formation Services, as such Executive Order 14071 affects this office…

Sanctions Don’t Stop Dirty Money, They Hurt Regular People

Governments claim that sanctions and financial restrictions prevent illicit money flows. The reality? People with "dirty" money always find a way. They exploit loopholes, set up shadow entities, and maneuver around restrictions with ease. Meanwhile, small business owners and regular individuals trying to follow the rules end up bearing the brunt of these policies.

Entrepreneurs are the ones:

• Drowning in endless paperwork

• Struggling to provide “extra documentation” that no one else is asked for

• Lacking the funds to hire lawyers to fight arbitrary decisions

A Game Of Double Standards

The war introduced a new layer of complexity. I haven’t lived in Russia for over 11 years. I built my career internationally, worked for foreign companies, and established businesses in multiple countries. Yet, when I try opening an account with some institutions, the process becomes a bureaucratic nightmare.

I hoped that crypto, built on different principles, would be indeed different. But that illusion shattered when Kraken (which I used for a long time) recently closed my business account. Also, saying I will be unable to open me another account in future. Which is just sad to see.

One of the major US crypto exchanges, for example, asked to provide proof of funds from five years ago, from Hong Kong (to prove that money isn’t coming from Russia). From the time when sanctions weren’t introduced yet.

This was among dozens of other documents they wanted me to provide. Surprised they didn't ask for my recent blood test.

The Crypto Industry’s Hypocrisy

Crypto institutions were supposed to be neutral, borderless, and resistant to censorship. Yet, in practice, they are asking for more documents and personal information than banks.

I have multiple bank accounts in the U.S., and none have ever required me to validate my financial history in such an intrusive way. But centralized crypto exchanges are turning into the very "evil" centralized institutions they claimed to disrupt.

The centralized exchanges are indeed under a lot of pressure from the US government. We're all doing business. The difference is whether we are being honest about who we are or not.

The Wrong People Pay The Price

The way financial restrictions are applied today isn’t about security; it’s about control. The people who are affected aren’t oligarchs or criminals—they’re entrepreneurs, small business owners, and those who are simply trying to operate within the system and follow the legal procedures.

Otherwise there are easier ways where no one will ask you questions. The truly corrupt find alternative paths to move their money freely.

Final Thoughts

This isn’t just my story—it’s the reality for countless individuals facing financial exclusion due to political conflicts not only in Russia, but in so many other countries.

Nevertheless, in all these situations, I was fine—I never relied on centralized financial institutions to that extent. However, it significantly slowed business operations, impacted my other company, and added an enormous amount of unnecessary headache, paperwork, and wasted time—something that is always a challenge for any entrepreneur.

I don’t want to live in hypocrisy. There are ways to use real crypto—outside centralized financial bodies—without discrimination, compliance hurdles, or legal nonsense. My issue is with centralized crypto players rushing to overcomply, often going further than traditional banks, while still claiming to be disruptors fighting for financial freedom. In reality, it’s becoming the exact opposite.

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