Grayscale filed a reply brief in its appeal of the United States Securities and Exchange Commission (SEC) denial of its application to convert its $12-billion Grayscale Bitcoin Trust (GBTC) into a spot-based Bitcoin (BTC) exchange-traded fund (ETF). The brief, filed in the District of Columbia Circuit Court, addressed points made in the SEC reply brief filed in December and restated its own arguments.

The SEC based its decision on findings that Grayscale’s proposal did not sufficiently protect against fraud and manipulation. The agency had made similar findings in a number of earlier applications to create spot-based BTC ETFs.

1/ As part of our suit challenging the SEC’s decision to deny $GBTC conversion to a spot #bitcoin #ETF, @Grayscale just filed our Reply Brief with the DC Circuit Court of Appeals. Here’s what you need to know:

— Craig Salm (@CraigSalm) January 13, 2023

Grayscale countered the denial with claims in court that the SEC had acted arbitrarily in treating spot traded exchange-traded products differently from futures traded products. “There is a 99.9% correlation between prices in the bitcoin futures market and the spot bitcoin market,” Grayscale stated in its brief. It also claimed the SEC had exceeded its authority:

“The Commission is not permitted to decide for investors whether certain investments have merit – yet the Commission has done just that, to the detriment of the investors and potential investors it is charged to protect.”

Grayscale chief legal officer Craig Salm said in a tweet, “The case is moving swiftly. While timing is uncertain, oral arguments may be as soon as Q2 [2023].” Grayscale applied to the SEC in October 2021, and the agency denied that application on June 29.

Related: Grayscale CEO highlights 20% GBTC share buyback option if ETF conversion fails

Fir Tree Capital Management sued Grayscale on Dec. 6 demanding, among other things, that Grayscale give up its appeal of the SEC decision. “That strategy will likely cost years of litigation, millions of dollars in legal fees, countless hours of lost management time, and goodwill with regulators,” the complaint read.

Grayscale is owned by the Digital Currency Group, which is currently undergoing a financial squeeze.