It's tricky. From the other side of the fence, when I was 11/12 I was friends with a girl that my mother disapproved of (or rather she had no particular issue with this friend but knew (or had heard) stuff about the family (the mother had various issues) and so wanted me to stay clear.
Anyway, my mum put out hte party whip that I was no longer to be friends with this girl. This (of course) just made me want to be friends with her more. My mum didn't go into details about her concerns, but I liked my friends mum and wasn't interested in what she was saying.
Cue, lots of rebellion from me (the only time in my life I ever rebelled against my mum) I just found it unacceptable that she would pick my friends, it was my friend and my decision to make. Lots of me going out, her telling me not to see friend x, me coming home and mum asking where I've been and me saying I've seen x - and lots of arguments etc.
In the end our friendship dwindled (we went to highschool and ended up in different classes so made new friends each, and we also moved a bit further away (walking distance but not as close) naturally.
I suppose my point is that whilst you know all this stuff and are understandably not wanting your son anywhere near that situation (I'd feel the same, as would any parent) your son, as a child, may view this entire situation differently and my fear would be if you start getting heavy handed about him playing with this boy, he'll stick to him more as he'll be so outraged that you're telling him who to be friends with.
I think it likely that as time goes on, your son will gravitate away from this boy himself (nobody wants to be the subject of random attacks) and in the meantime I'd be tempted just to continually reinforce what you have been doing, that it's not okay to hit someone (even if you've suffered abuse yourself) that if his dad has hit his friend then he should be wary of that, and tell him it's not right and not acceptable (maybe even suggest he makes sure that he's not left alone with him?)
Basically, I think you need to try and 'guide' him through this friendship whilst protecting him, whilst trying not to 'ban' this friend (as this may just result in him either hiding his friendship, or being incredibly resentful to you ) But all of this is easier said than done when it's your own child - and I'm not sure how I'd respond, I only know how I felt when my mum had 'banned' my friend at a similar age.