Like I said though, friend 1 is 100% entitled to deal with his friends betrayal in whatever way he chooses, just as the rest of the people who are friends with friend 2 should be entitled to manage their friendship with friend 2.

When something like this happens it reveals the true nature of a person, deciding whether to be friends with that person or not after they do something like this is a reasonable request?

This is a big deal and sweeping it under the rug will cause more hurt in the long run. If needs be then I would be happy to confront friend 2 away from friend 1, but that's what my advice request is about, in what manner to proceed. I'm not gonna just ignore something like this.