The art world often operates in gray legal areas. Activities that would be illegal if done for a commercial purpose are just fine, or at least the law will look the other way, if the same activities are part of creative expression.
While interning at The Society of Arts and Crafts, Boston (“SACBOS”) we were discussing mutilated-coinage-as-art. One of the artists in their upcoming “From Minimal to Bling” contemporary studio jewelry exhibition, Stacey Lee Webber, made a series of pieces constructed entirely out of soldered coins.
This brought to mind 18 U.S.C. § 331, which states:
“Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the mints of the United States, or any foreign coins which are by law made current or are in actual use or circulation as money within the United States; or
Whoever fraudulently possesses, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or brings into the United States, any such coin, knowing the same to be altered, defaced, mutilated, impaired, diminished, falsified, scaled, or lightened— Shall be fined under this title or imprisoned not more than five years, or both.”
This declares pretty clearly that it is illegal to deface coins for use as an artistic medium of expression. Yet there is definitely artistic precedent for using coins for creative purposes. Indeed, it’s a common for there to be penny machines at amusement parks or tourist destinations that will smash your coin into a commemorative art object!
There is some consensus that “fraudulently” is the key word, so that as long as you aren’t trying to alter a coin and then pass it off as legitimate you’re legally fine. This… isn’t exactly the case, though it is persuasive.
The U.S. Treasury dodges the question “Is it illegal for people to use coins to make jewelry, souvenirs or other items?” by stating, “Coins that are chipped, fused, and not machine-countable are considered mutilated. The Mint redeems mutilated coins at the value of their metal content.”
The Treasury further explains that:
“This statute means that you may be violating the law if you change the appearance of the coin and fraudulently represent it to be other than the altered coin that it is. As a matter of policy, the U.S. Mint does not promote coloring, plating or altering U.S. coinage: however, there are no sanctions against such activity absent fraudulent intent.”
In the Code of Federal Regulations (CFR) there are some regulations specific to nickels and pennies that are informative this topic. 31 CFR § 82.1 forbids unauthorized persons from exporting, melting, or treating any 5 or 1 cent coins.
This has been a particular problem over nickels and dimes because of unstable commodities prices. For awhile the copper in pennies was worth more than the penny, so people would hoard pennies then melt them for their base metal. It costs more than face value to manufacture pennies or nickels, so any wide-spread loss of the coins in circulation could theoretically be draining on the Treasury. This was more of a problem when coins were still made of precious metals like silver and gold, so historically strict laws against alteration make more sense.
31 CFR § 82.2 goes on to state that: “(b) The prohibition contained in § 82.1 against the treatment of 5-cent coins and one-cent coins shall not apply to the treatment of these coins for educational, amusement, novelty, jewelry, and similar purposes as long as the volumes treated and the nature of the treatment makes it clear that such treatment is not intended as a means by which to profit solely from the value of the metal content of the coins.”
So artists get a free pass for altering nickels and pennies, at least so long as they stick to melting and treating. That still leaves the illegal activities of altering, defacing, and mutilating as per 18 U.S.C. § 331. Yet it seems like the Treasury has given its tacit approval to the mutilation of coins for creative purposes.
So it’s only “kind of” illegal.