It is not defacing if it is "Art." It is a bit of a grey area, but I understand that the Department of the Treasury has a regulatory caveat that covers this.
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Under Title 18 USC § 331 and 333 can be interpreted as it is only illegal if the intent is fraudulent.
Smitty is correct. I'd like to add to this...
It's illegal if for example, you melted down a nickle and cast it into two dimes (which is entirely possible given relative masses). It's not illegal to take a quarter, hammer it flat, then drill out the center to make a ring.
I actually did this in my high school art class a couple years ago. You just drill a small little hole in the coin and then use a small saw to cut around the silhouette.
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Under Title 18 USC § 331 and 333 can be interpreted as it is only illegal if the intent is fraudulent.
It's illegal if for example, you melted down a nickle and cast it into two dimes (which is entirely possible given relative masses). It's not illegal to take a quarter, hammer it flat, then drill out the center to make a ring.
Unless you wanna drill a hole in their head then by all means a necklace