I agree that Epic Games should have never allowed them in the tournament in the first place. That's a mistake on Epic's part and it does make them seem like they're trying to weasel out of paying prize money.

This is discrimination. But not all discrimination is unjustified. I discriminate against people all the time. I discriminate against unpleasant people when choosing whom I interact with. I discriminate against companies that have a history of doing bad things. Epic discriminates against residents of a country that broke a decades-long peace in Europe. I believe it is justified.

I think a good compromise solution would be to donate the prize money to a humanitarian organisation. That way it doesn't seem like Epic is only doing it because of the money.