Is my wife cheating?

Last year we began talking about an open relationship. I noticed my wife getting very close with a male coworker. Our 2 families became very close. Hanging out on weekends, camping, etc. She expressed to me a desire to swap with them. We were both into the idea. She never told me that she discussed it with him. Months later I wondered if they were sleeping together so I looked at the pics on her phone. There were several nude selfies of her. Topless, legs spread open, a video of her masturbating with a vibrator. Without telling her that I saw the pics, I asked if the 2 of them had ever had sex. She said No. And then she said that she was all talk and would never actually do anything. A day later I told her that I saw the pics. She admitted that they had sex twice, 3 months earlier. And she felt bad because he's married and were all friends. So she put an end to it. She galso told him that I wouldn't care about knowing about them. But I never said that.

Now 3 months later i found the pics. she said she got over it and sent more nudes. I told her this feels inappropriate but she insists on remaining friends with him even though I asked her not too. She also will not tell him that i know. They even went out for drinks the other night. She now hides her frienship with him from me.

Was this cheating? Am I Crazy?