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.

Here's that fine line; if you smash a penny or create a hobo nickel and keep it our sell it as smashed penny or hobo nickel, you're doing fine. The minute you take that coin to the store and use the coin, you might spend a little time in jail (if you get caught).

I have read of cases back in the early 1800 - 1900's where people would scrape the rims off of gold coins so they could melt the gold for other things and then turn around and use the coins to buy something else. They would end up spending time in jail for that stunt.

If you don’t think you can get in trouble for defacing coins, go take a drill press to a hundred dollar coins (using a really big maybe a 3/4 inch bit to make a really big hole). Then go down to your local bank and trade them in for a $100 bill. If they ask you what happened, tell them you were making a point and wanted to see if you could get away with defacing some coins .