When setting up the VM for Storage Sync, the IP address used for the VM's DNS lookup must be the same IP address as the machine used for Active Directory (the Windows domain controller).  You cannot have separate DNS and Active Directory lookups. 

The example below shows how the Storage Sync appliance is configured with an incorrect IP address.

The appliance is configured as

Active Directory and DNS server on

Primary DNS server on

You need to change the Storage Sync DNS lookup IP to, do NOT use