Join Date: Apr 2013
Location: Washington, USA
I usually associate white fuzz with mold. IME it simply goes away after a while (couple weeks). I've seen some fish actually nibble at it. Don't know if it is particularly toxic, but I had no deaths at the time.
You could scrub it off, but it will probably come back; mold grows where it can find nutrients, your driftwood might just be rich in the good stuff right now.
I've never tried it, but boiling the driftwood for a while might break down the nutrients on the surface that the mold wants.