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I have been warned about this one for the same reasons- take small fish and inverts. Maybe best to move it to a sump or keep spare tank until you can re-home if you choose not to keep it!
Definatley not reef safe, these guys can get up to 12 inches, i have one the size of my fist in my predator tank and it has eaten all my other hermit crabs, it will eat anything it can catch sorry
Please do not just set him free at the beach. The white spotted hermit is indigenous to the Indo-Pacific and unless u actually live over there, u should not be releasing a non-native creature into the wild. Our waters have enough invasive species in them. I'm sure ur LFS will be happy to take it back.