How do I go about setting boundaries with my guy friend?

First of all, I'd like to preface this by saying my husband and I have different boundaries than what most people may consider normal. We are much more open about our sexualities and what constitutes cheating. So if that's not something you support or if you feel like you can't give an unbiased opinion, then maybe this isn't the post for you.

My husband also knows about everything that goes on with this friend- I tell him every day about our conversations and there are no secrets. I love and respect my husband and we have OUR OWN boundaries and rules set for our relationship.

So, my friend. We'll call him C. He and I have been friends for 2 years now and met through online gaming. We talk and game all the time- he lives about 12 hours away in another state, but we've all met up and hung out in person once before. He and I have a very ...verbally abusive friendship, and it's a really good way for both of us to relieve stress. We both care about each other and have helped each other through some rough and stressful times, but we very much have a rough and tumble "fuck you" "no fuck you" relationship and it's amazing for stress relief. We're both high strung, sassy, sarcastic assholes and it just works. We joke around all the time, and it very often gets sexually inappropriate as well, but not in a direct sense. (Again, my husband is literally in the same room with us while we talk about these things, and nothing is hidden or considered crossing boundaries) So I'm used to him being a horny bastard, and I'll usually talk shit back if he gets inappropriate.

Personally I'm asexual and have an extreme aversion to sexual activities, my husband is the only person who I have and ever will do anything remotely sexual with. That's part of the reason why he doesn't mind C, he trusts me and knows that I'm in no way actually interested in C and I put him in his place when he gets too sexual. But we do joke about inappropriate things, it's just how the friendship is and it's pretty common with gamers. Even my husband gets inappropriate with his friends online, male and female. No harm no foul.

Well, lately C has been taking it to another level. He's been joking about me sending him nudes. The last few weeks I've been brushing it off and calling him out, but I haven't really stressed that that's getting into "Genuinely not appropriate" territory. He still thinks it's funny. He knows he'll never get any, but he's testing the limits and it's annoying. I told my husband about it and he agreed that's where the line is drawn for us and I should sit down and have a real talk with him about it. Up until this point, nothing has been personal. He's been fine about respecting boundaries and he's never given me any reason to think that he's trying to get in my pants or something. (I mean, shit, he says the same stuff to my husband that he does to me. They'll both literally joke about being lovers ffs haha)

So while I can see why he thinks this might be okay because of how the friendship already has been going, I don't know how to bring it up to him that this is the limit. He's a smart man and I respect him, it's just annoying that he's now starting to edge into personal territory. I already have my mind made up that if he continues after we have a discussion, then it's obvious he doesn't respect me and my husband. But I'm willing to give him a chance to tone it down and see where the boundaries are at. How should I go about discussing this with him? We've had deep talks before about our issues and life stuff, but it's weird now that it's an issue between us.