CentOS 7 ec2 smtpd – Client host rejected: Access denied

I've been trying to figure this out for hours and can't quite wrap my head around it.

I have a mail server on an ec2 instance running CentOS7 that has postfix, courier (authlib and imap), sasl, amavisd, spamassassin and roundcube configured on it. When I telnet localhost 25 then I can successfully send emails even out of my ec2 instance.

I installed roundcube to make it easier for users to read/send emails. I can login no problem, I can see my emails and can read them (so imap is working properly). My issue however comes when I want to send emails out from roundcube (over smtps port 465). It pops up with unable to set recipient and the following error message:

NOQUEUE: reject: RCPT from unknown[127.0.0.1]: 554 5.7.1 <unknown[127.0.0.1]>: Client host rejected: Access denied;

Full stack of email sending attempt:

Nov  6 08:11:26 ip-172-31-9-181 postfix/smtpd[5651]: connect from unknown[127.0.0.1]
Nov  6 08:11:26 ip-172-31-9-181 postfix/smtpd[5651]: Anonymous TLS connection established from unknown[127.0.0.1]: TLSv1.2 with cipher ECDHE-RSA-AES256-GCM-SHA384 (256/256 bits)
Nov  6 08:11:26 ip-172-31-9-181 postfix/smtpd[5651]: NOQUEUE: reject: RCPT from unknown[127.0.0.1]: 554 5.7.1 <unknown[127.0.0.1]>: Client host rejected: Access denied; from=<sender@mydomain.com> to=<reciever@mydomain.com> proto=ESMTP helo=<mail.mydomain.com>
Nov  6 08:11:26 ip-172-31-9-181 postfix/smtpd[5651]: disconnect from unknown[127.0.0.1]

This is my roundcube configuration in config.inc.php

$config['default_host'] = 'ssl://localhost';
$config['default_port'] = 993;
$config['imap_auth_type'] = 'LOGIN';
$config['image_force_ns'] = true;

$config['smtp_server'] = 'ssl://localhost';
$config['smtp_port'] = 465;
$config['smtp_helo_host'] = 'mail.mydomain.com';

I've tried setting

$config['smtp_user'] = '%u';
$config['smtp_pass'] = '%p';

But that causes an SASL error:

Nov  6 08:24:01 ip-172-31-9-181 postfix/smtpd[5705]: connect from unknown[127.0.0.1]
Nov  6 08:24:01 ip-172-31-9-181 postfix/smtpd[5705]: Anonymous TLS connection established from unknown[127.0.0.1]: TLSv1.2 with cipher ECDHE-RSA-AES256-GCM-SHA384 (256/256 bits)
Nov  6 08:24:01 ip-172-31-9-181 postfix/smtpd[5705]: warning: SASL authentication failure: client response doesn't match what we generated (tried bogus)
Nov  6 08:24:01 ip-172-31-9-181 postfix/smtpd[5705]: warning: unknown[127.0.0.1]: SASL DIGEST-MD5 authentication failed: authentication failure
Nov  6 08:24:01 ip-172-31-9-181 postfix/smtpd[5705]: disconnect from unknown[127.0.0.1]

Which has gotten me so confused that I can't figure out what is even causing it? is it smtp, sasl or something else? All services required are enabled and start up with no problems.

This is my output of postconf -n

alias_database = hash:/etc/postfix/aliases
alias_maps = hash:/etc/postfix/aliases
broken_sasl_auth_clients = no
command_directory = /usr/sbin
config_directory = /etc/postfix
content_filter = amavis:[127.0.0.1]:10024
daemon_directory = /usr/libexec/postfix
data_directory = /var/lib/postfix
debug_peer_level = 2
debugger_command = PATH=/bin:/usr/bin:/usr/local/bin:/usr/X11R6/bin ddd $daemon_directory/$process_name $process_id & sleep 5
delay_warning_time = 4h
disable_vrfy_command = yes
header_checks = regexp:/etc/postfix/header_checks
html_directory = no
inet_interfaces = all
inet_protocols = ipv4
local_destination_concurrency_limit = 5
local_destination_recipient_limit = 300
local_recipient_maps =
mail_owner = postfix
mailbox_transport = lmtp:unix:/var/lib/imap/socket/lmtp
mailq_path = /usr/bin/mailq.postfix
manpage_directory = /usr/share/man
masquerade_domains = mail.mydomain.com mydomain.com
masquerade_exceptions = root
maximal_backoff_time = 8000s
maximal_queue_lifetime = 7d
mime_header_checks = pcre:/etc/postfix/body_checks
minimal_backoff_time = 1000s
mydestination =
mydomain = mydomain.com
mynetworks_style = host
myorigin = $mydomain
newaliases_path = /usr/bin/newaliases.postfix
queue_directory = /var/spool/postfix
readme_directory = /usr/share/doc/postfix-2.10.1/README_FILES
recipient_delimiter = +
relayhost =
sample_directory = /usr/share/doc/postfix-2.10.1/samples
sendmail_path = /usr/sbin/sendmail.postfix
setgid_group = postdrop
smtp_helo_timeout = 60s
smtp_tls_CAfile = /etc/ssl/certs/ca-certificates.crt
smtp_tls_note_starttls_offer = yes
smtp_tls_security_level = may
smtpd_banner = $myhostname ESMTP $mail_name
smtpd_client_restrictions = reject_rbl_client sbl.spamhaus.org, reject_rbl_client blackholes.easynet.nl, permit
smtpd_data_restrictions = reject_unauth_pipelining
smtpd_delay_reject = yes
smtpd_hard_error_limit = 12
smtpd_helo_required = yes
smtpd_helo_restrictions = permit_mynetworks, warn_if_reject reject_non_fqdn_hostname, reject_invalid_hostname, permit
smtpd_recipient_limit = 16
smtpd_recipient_restrictions = permit_sasl_authenticated, permit_mynetworks, reject_unauth_pipelining, reject_non_fqdn_recipient, reject_unknown_recipient_domain, reject_unauth_destination, permit
smtpd_sasl_auth_enable = yes
smtpd_sasl_local_domain =
smtpd_sasl_security_options = noanonymous
smtpd_sender_restrictions = permit_sasl_authenticated, permit_mynetworks, warn_if_reject reject_non_fqdn_sender, reject_unknown_sender_domain, reject_unauth_pipelining, permit
smtpd_soft_error_limit = 3
smtpd_tls_cert_file = /etc/postfix/unime.cert
smtpd_tls_key_file = /etc/postfix/unime.key
smtpd_tls_loglevel = 1
smtpd_tls_received_header = yes
smtpd_tls_security_level = may
smtpd_tls_session_cache_timeout = 3600s
soft_bounce = no
tls_random_source = dev:/dev/urandom
unknown_local_recipient_reject_code = 450
virtual_alias_maps = mysql:/etc/postfix/mysql_alias.cf
virtual_gid_maps = static:5000
virtual_mailbox_base = /var/spool/mail/virtual
virtual_mailbox_domains = mysql:/etc/postfix/mysql_domains.cf
virtual_mailbox_maps = mysql:/etc/postfix/mysql_mailbox.cf
virtual_uid_maps = static:5000

This is my master.cf file:

smtp      inet  n       -       n       -       -       smtpd
submission inet n       -       n       -       -       smtpd
    -o smtpd_sasl_auth_enable=yes
    -o smtpd_tls_auth_only=yes
    -o smtpd_recipient_restrictions=permit_sasl_authenticated.reject_unauth_destination,reject
    -o smtpd_client_restrictions=permit_sasl_authenticated,reject_unauth_destination,reject
    -o smtpd_sasl_security_options=noanonymous,noplaintext
    -o smtpd_sasl_tls_security_options=noanonymous
smtps     inet  n       -       -       -       -       smtpd
    -o smtpd_tls_wrappermode=yes
    -o smtpd_sasl_auth_enable=yes
    -o smtpd_tls_auth_only=yes
    -o smtpd_recipient_restrictions=permit_sasl_authenticated,reject
    -o smtpd_client_restrictions=permit_sasl_authenticated,reject
    -o smtpd_sasl_security_options=noanonymous,noplaintext
    -o smtpd_sasl_tls_security_options=noanonymous
pickup    unix  n       -       n       60      1       pickup
    -o content_filter=
    -o receive_override_options=no_header_body_checks
cleanup   unix  n       -       n       -       0       cleanup
qmgr      unix  n       -       n       300     1       qmgr
tlsmgr    unix  -       -       n       1000?   1       tlsmgr
rewrite   unix  -       -       n       -       -       trivial-rewrite
bounce    unix  -       -       n       -       0       bounce
defer     unix  -       -       n       -       0       bounce
trace     unix  -       -       n       -       0       bounce
verify    unix  -       -       n       -       1       verify
flush     unix  n       -       n       1000?   0       flush
proxymap  unix  -       -       n       -       -       proxymap
proxywrite unix -       -       n       -       1       proxymap
smtp      unix  -       -       n       -       -       smtp
relay     unix  -       -       n       -       -       smtp
showq     unix  n       -       n       -       -       showq
error     unix  -       -       n       -       -       error
retry     unix  -       -       n       -       -       error
discard   unix  -       -       n       -       -       discard
local     unix  -       n       n       -       -       local
virtual   unix  -       n       n       -       -       virtual
lmtp      unix  -       -       n       -       -       lmtp
anvil     unix  -       -       n       -       1       anvil
scache    unix  -       -       n       -       1       scache
amavis    unix  -       -       -       -       2       smtp
    -o smtp_data_done_timeout=1200
    -o smtp_send_xforward_command=yes
    -o disable_dns_lookups=yes
    -o max_use=20

127.0.0.1:10025 inet n - - - - smtpd
    -o content_filter=
    -o local_recipient_maps=
    -o relay_recipient_maps=
    -o smtpd_restriction_classes=
    -o smtpd_delay_reject=no
    -o smtpd_client_restrictions=permit_mynetworks,reject
    -o smtpd_helo_restrictions=
    -o smtpd_sender_restrictions=
    -o smtpd_recipient_restrictions=permit_mynetworks,reject
    -o smtpd_data_restrictions=reject_unauth_pipelining
    -o smtpd_end_of_data_restrictions=
    -o mynetworks=127.0.0.0/8
    -o smtpd_error_sleep_time=0
    -o smtpd_soft_error_limit=1001
    -o smtpd_hard_error_limit=1000
    -o smtpd_client_connection_count_limit=0
    -o smtpd_client_connection_rate_limit=0
    -o receive_override_options=no_header_body_checks,no_unknown_recipient_checks

And this is my sasl2/smtpd.conf file:

pwcheck_method: saslauthd
mech_list: plain login cram-md5 digest-md5
log_level: 7
allow_plaintext: true
auxprop_plugin: sql
sql_engine: mysql
sql_hostnames: 127.0.0.1
sql_user: xxxxx
sql_passwd: xxxxx
sql_database: xxxxx
sql_select: xxxxx

Any help would be appreciated to finding out the issue behind it. If any more info is needed to find out the cause, then let me know.