How do I…

How do I go about telling someone that I don’t really think I want to be their “close friend” anymore? I enjoy hanging out with this person, but recently they’ve made choices that I just can’t stand behind them on. If I tell them this, and tell them the reason why, they’ll blame it on another friend of mine, that’s what they’ve done with regards to everyone else who has made the same decision up to this point. Morally, ethically, I just can’t really stomach what he has done.

I just don’t know how to deal with this all at this point. Work is being extra stressful, and with all of this, I’m just going crazy.