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I'm aware that it's currently illegal to melt down US pennies and nickels in order to make a profit from high scrap metal prices (assuming the prices were high enough).

However, given such activity is not counterfeiting nor is it fraud, what kind of crime is it, and what exactly is the punishment for it?

Personally, I have no interest in melting down coins, but if the rise of Bitcoin taught me anything, it's that black markets affect prices (in this case, the real world value of metal coins). Independent of how one feels about this kind of criminal activity, the financial affect of black markets is still real and could affect the price people are willing to pay for coins in the future if prices rise. In other words, I'm not sure the law against coin melting matters very much in terms of how valuable coins will be on eBay in the future.

A related question: how realistic is it for people in Canada or Mexico to profitably (and legally) melt down US coins? Can American citizens legally melt down Canadian coins within the United States?

PennyPincher wrote:I'm aware that it's currently illegal to melt down US pennies and nickels in order to make a profit from high scrap metal prices (assuming the prices were high enough).

However, given such activity is not counterfeiting nor is it fraud, what kind of crime is it, and what exactly is the punishment for it?

Personally, I have no interest in melting down coins, but if the rise of Bitcoin taught me anything, it's that black markets affect prices (in this case, the real world value of metal coins). Independent of how one feels about this kind of criminal activity, the financial affect of black markets is still real and could affect the price people are willing to pay for coins in the future if prices rise. In other words, I'm not sure the law against coin melting matters very much in terms of how valuable coins will be on eBay in the future.

A related question: how realistic is it for people in Canada or Mexico to profitably (and legally) melt down US coins? Can American citizens legally melt down Canadian coins within the United States?

they have been... ever since Trump got elected.

PennyPincher wrote:However, given such activity is not counterfeiting nor is it fraud, what kind of crime is it, and what exactly is the punishment for it?

It's a violation of a Department of Treasury regulation punishable by up to 5 years in prison and $10,000 in fines, plus forfeiting any coins or melted metal they can find. I would imagine they would try to apply that for every instance of melting or exporting, which could add up quickly.

PennyPincher wrote:A related question: how realistic is it for people in Canada or Mexico to profitably (and legally) melt down US coins? Can American citizens legally melt down Canadian coins within the United States?

I heard stories of truckloads of pennies going to Mexico prior to the melt ban.

To the best of my knowledge, Canadian law prohibits melting Canadian coinage but not US coinage, US law prohibits melting US coinage but not Canadian coinage, US law prohibits exporting pennies and nickels to profit from the metal content, Canadian law does not prohibit exporting Canadian coinage, and Mexican law...I have no idea, but I doubt they prohibit importing and melting foreign coinage. So I guess if you stumble upon US coins already in Mexico or Canada, that you did not bring there, then it would not be illegal to melt them. But that's a pretty limited subset of coinage. Any operation that involves melting US pennies and nickels in the US, or moving US pennies and nickels out of the US (except for very small quantities for numismatics and for use as currency) is illegal under US law. It appears that you could legally import Canadian pennies and nickels into the US and melt them, but I'm not a lawyer.

I don't think there is any issue legally with melting Canadian coin in the US, the problem is finding it in an economical quantity and economical shipping dock to dock to a refiner willing to work with you, since most is sucked up by the Canadian government's alloy recovery program already. The other thing is that once someone assembles a truckload, they are going to want close to copper price for it, since they've already done most of the work, so freight and refining are going to pretty much make it a wash. So Canadian 98% pennies should be trading pretty close to melt in theory.

In theory you should be able to walk Canadian 98% into a US scrapyard and get #1 copper price for them, but some yards are skittish about taking coin on the chance that there is some US mixed in.

The main opportunity is, and has been since the melt ban, the long-term buy and hold arbitrage in the event that melting pre-82s becomes legal again. As Nate points out, there aren't currently any "loopholes" unless you were to find a small hoard already in Canada or Mexico, but that would just be a one-off and not anything that would really affect the market or price.

I'd hold onto the Canadian. There may be a collector market for them some day. Just my opinion.

oober wrote:I'd hold onto the Canadian. There may be a collector market for them some day. Just my opinion.

Yes. I plan on doing that as well.

what if the melting wasn't done for profit?

You can melt/deface reasonable quantities for science, art, & education. See: penny smashing machines in tourist traps

Soooo, if you cast and created a replica of a historical cannon in actual size . . . it might be considered reasonable art/education? There are a lot of ugly Abes out there, just saying.

I love those penny smashing machines, although I don't see them around much, nor do I seek them out. But yeah, would love to melt the copper pennies down into sizable bars.

AGgressive Metal wrote:You can melt/deface reasonable quantities for science, art, & education. See: penny smashing machines in tourist traps

everything wrote:I love those penny smashing machines, although I don't see them around much, nor do I seek them out. But yeah, would love to melt the copper pennies down into sizable bars.

AGgressive Metal wrote:You can melt/deface reasonable quantities for science, art, & education. See: penny smashing machines in tourist traps

I was just at Columbus zoo and I bet they have 50 of them
My kids each made one