What is SMTP Discovery?
SMTP Discovery allows the Proofpoint encryption service to process email for new addresses that you (as the Office 365 administrator) have added to your Office 365 account, but have not yet added to the email encryption service. SMTP Discovery relays email messages to the unlicensed users until you add them to the encryption service.
If you don't regularly monitor and manage the activity of your email accounts, you'll most likely receive an SMTP Discovery Warning Report from Proofpoint. This report informs you of actions you need to take to add users and distribution lists to the encryption service.
If you fail to manage users appropriately within 4 weeks of receiving the report, it could impact mail flow for the affected email addresses, and it could result in your organization being billed for aliases and functional accounts.
An SMTP Discovery Warning Report is sent by email, and it looks something like this: