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Toadstool closing

a couple of weeks ago I added an emerald crab to take care of some bubble algae...he's been a good citizen for the most part but when he's go near the toadstool it would close up. Lately I've noticed the toadstool is closed most of the time and has a yellow growth near its base, and this yellow area is expanding. Is this a sponge? Some other irritant?
I also have seen a much smaller (not growing) yellow area near my Kenya, but no change in its behavior. Pictures below, though I'm not sure if the clarity is sufficient. Thanks!
 

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To me it’s looks like a sponge some can potentially smother coral and potentially release toxins, a tooth brush or scalpel/razor can easy cut most of it away, it’s also not uncommon for leather coral to close up for a few days to a couple weeks as they periodically shed and grow.
 
Thanks, I'd read about their closing to shed but it's been on and off for several days now, plus the coral used to curve away from the rock and lie more or less horizontal, now it's much closer to the rock and is aligned more vertically. It's attached to the rock so if I remove the sponge I'll have to do it in the water-shouldn't be hard but I'm hoping to preserve the sponge-its another interesting and colorful part of my ocean. I'll monitor it for more signs of distress before deciding what to do.
 
Thanks for the advice-it's nice to have my toadstool back! Brushed the sponge off and it took a couple of days but it's open and back to itself. My wife and oldest daughter love that coral.
 
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