It's a beneficial detritivore commonly called a "bristleworm." It's a polychaete worm, possibly Eurythoe complanata. Never touch these with your bare hands because their bristles are slightly venomous.
They are great scavengers. They are mostly nocturnal and only rarely come out if the lights are on. They reproduce freely in our reef tanks. If you search your sand bed and live rock about an hour or two after all lights (including room lights) are off, you should see some more of them in various sizes. You will need to use a red flashlight or a flashlight with red cellophane over the lens. You can use a regular white light flashlight but the bristleworms will immediately disappear into their hiding places once the light comes on.
Ninong
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