<a href=showthread.php?s=&postid=12996155#post12996155 target=_blank>Originally posted</a> by melev
It isn't all that clear to see, but it seems like it is merely a white sponge. It won't really do any harm unless it can take over the coral, which I doubt.
The one thing you do need to know about sponge is if it is exposed to air, it dies. If you pull out that coral to cut branches, you must scrape off any sponge and dispose of it because it will die as soon as it is exposed to air for even seconds. You don't want that stuff dying in your tank. This goes for live rock with sponge on it as well.
However, there is no reason to fear it either. I have tons of sponge in my reef. All different colors. As long as it is submerged, it's fine. And if you happen to have any angels in your tank, they'll eat it.