Hello,
We've found that this issue occurs because Require SMTP Authentication is enabled for the domain. SmarterMail is expecting authentication, and the delivery fails because it is not provided. At this time, the only solution for bypassing that requirement is to whitelist the IP. However, we've escalated this functionality for review, as we can see how that is not an ideal solution.
Paul, I understand you are running a similar setup in version 15.x. Can you confirm whether you have SMTP Authentication enabled for that domain?
Andrea Free
SmarterTools Inc.
877-357-6278
www.smartertools.com