Some leads for you for starters: try Image search on Haliclona blue sponge, it would be my best guess, and some links, mentioning it in the tanks:
Wetweb on sponges,
should be high light,
another similar thread,
one more,
sponges care, incl. Haliclona.
I had one, bought with whitish dead spots, expected it to recover, like it was said in one of the articles, that sponges can regrow after being chopped almost to a few cells size... Didn't happen. Continued to die in days. When had nothing to lose, in ~3 days, removed it from the tank,without exposing to air, cut off the dead area, placed in hospital tank. I could see, that the bigger channels in the dead area were clogged by aragonite sand - and I was extremely cautious, not to let this happen.
I don't know, are they toxic, when dying or not - opinions differ, but have a strong suspicion, that it started the tank crash. Sea stars, slugs, cucumbers, sps and most of fish were affected most, but crustaceans, softies and LPS - not.
Not much help, but you can start the search from here.
Best of luck!
