Well the first thing I would do is make sure he's serious. I put in little nonsense notes every now and then just to keep things light, and maybe this guy's done the same thing. If he is, just tell him you won't be involved in any cash deals since it's not allowed in your league rules (assuming that's the case). If he was unaware of this, that might be the end of the issue. Finally, if after all of this a lopsided deal turns up in the league, then I would explain to the commish why you think the traded should be vetoed (and as has been suggested, keep the email for proof). That's when you kick up the stink, but get your facts straight first.
Having said that, it would be interesting to see a money league where it's made very clear at the beginning that cash deals are allowed. For every extra dollar you spend, you're reducing your return, so that would keep payments under control. It would be like one big six-month-long hand of poker, where at the end there's just two guys left in it. If you're one of the early sellers, then obviously you'd want to be in another league, but I'd like to see how that plays out.