"I kind of got in front of it, which is good. But it was a slightly dark period. A bad couple of weeks… It was like a death. It was like one of those devastating things to find out."
Reynolds, who said the photos were of his family, including one of them in the delivery room, admitted he hasn't spoken to his friend again since the incident happened.
When asked about his friend's motivations for trying to sell the snaps he added: "Just for money. I mean, I don’t think he thought he would ever be caught.
"It’s just, 'Oh, well, now I’m never going to see you or talk to you again, unfortunately.' That’s kind of how it worked out."
Aside from revealing his friend's disloyalty, Reynolds gushed about how much he loved fatherhood.
He added: "I have no problem waking up five times in the middle of the night and changing diapers, and as exhausted as you get, I have this stupid grin on my face all the time."
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Reynolds married Lively in 2012, after meeting during filming in 2010.
Shortly after their daughter James was born, the 38-year-old actor spoke about his excitement about being a hands-on dad.
"I'm good with diapers and all that kind of stuff because I have lots of nieces and nephews, so I’ve done it all before. I’m just excited about having a buddy."
Blake Lively And Ryan Reynolds
Blake And Ryan(01 of94)
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At the 'Chime For Change: The Sound Of Change Live' Concert on June 1, 2013 in London, England, the pair make a rare appearance together; she in a '70s style mini dress with a cape detail and he in a sexy street style chic blue leather jacket and matching jeans, shirt and tie. (credit:Ian Gavan/Getty Images for Gucci)
Blake Lively and Ryan Reynolds(02 of94)
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Chris Martin, Tracy Pollan, Michael J. Fox, Ryan Reynolds and Blake Lively attend the 2013 A Funny Thing Happened On The Way To Cure Parkinson's event benefiting The Michael J. Fox Foundation for Parkinson's Research at The Waldorf=Astoria on November 9, 2013 in New York City. (Photo by Dimitrios Kambouris/MJF2013/WireImage)
Blake And Ryan(03 of94)
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At San Diego Comic Con on July 24, 2010, the twosome, who weren't a couple then (Ryan was married to Scarlett Johansson), wore complementary white-and-black outfits. See! It was meant to be! (credit:Kevin Winter/Getty Images)
Blake And Ryan(04 of94)
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At the Spike TV 'Scream 2010' awards, Oct. 16, 2010, the pair wore contrasting yet complementary outfits; Ryan sporting yet another leather jacket and jeans and Blake channeling her inner Greek goddess in a flowing dress with a high slit. (credit:Jeff Kravitz/FilmMagic)
Blake And Ryan(05 of94)
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At the premiere of "The Green Lantern" in June 2011, the co-stars seemed to subconsciously know that one day Blake would be walking down the aisle in white. (credit:AP)
Blake And Ryan(06 of94)
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Blake's a vision in white (again) at a "Green Lantern" presentation in Las Vegas in March 2011, while Ryan goes casual professional. (credit:Ryan Miller/Getty Images)
Blake And Ryan(07 of94)
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At the 2011 MTV Movie Awards the friends-only dipped into their blue period with matching outfits - again. (credit:Kevin Winter/Getty Images)