I'll preface this by saying I fully expect a ton of rainbows for this, but you're reading the entire situation wrong.
From a logistical standpoint, the case will be tricky, as it involves proving the falsity that KiwiFarms did not host certain information, which would be complicated to explain and likely require the retention of an expert witness if the case does not immediately settle, which further increases costs.
That's not how things work. You don't need to prove your innocence. Epik made matter-of-fact claims that this site hosts CP. Epik would be required to prove those claims, citing chapter, verse, etc. Can't prove those claims? Then it's defamation.
Suing them for it is the legal equivalent of saying "put up or shut up."
What damages are you going to be able to show?
Libel
per se assumes malice from the beginning, and does not require the plaintiff to plead or prove damages.
Cornell Law School Legal Information Institute:
Unlike in a traditional action for
libel, in an action libel per se,
malice is presumed, and
damages may be recovered without the
plaintiff needing to plead or proving
special damages (libel that requires a showing of damages are sometimes referred to as "libel per quod").
Are you willing to settle a case or do you want to take it all the way to trial?
Pretty sure Null's already said that he'd be willing to settle, so long as it involves a full public retraction and clearing of his name by Epik.
At this point, there is no choice, IMO. If he loses, yes, that could be the end of the Farms. But if he does nothing, the allegations become accepted as "legally true" (even if factually false), he's blacklisted from any/all registrars and hosting, and it's still the end of the Farms.
The question isn't "can you afford to lose" so much as "do you die on your knees, or go out fighting?"
The most important question, I suppose, is what does Null want to achieve and is a lawsuit the best avenue to achieve it?
Pretty sure Null has stated that the main thing he wants to achieve is to clear his name, put other entities on notice that libel against him or this site will
not be tolerated, and to have a legal precedent he can point to when further accusations are inevitably made. In my non-lawyer opinion, yes, a lawsuit is the best avenue to achieve this, as the only thing that could make other players think twice about defaming Null or the Farms is a binding legal ruling stating that "you cannot issue false allegations and get away with it."