I have to believe that DC did alot of research before undertaking this project. After all, he is trying to create a legitimate business here(Moonlight Mint) and would not want to do something overtly illegal. IIRC, I read on another forum that he had also undertaken legal consultations so if something happens, he is fully prepared to make his case. I am also of the opinion that DC had other motives here- he wants to provoke the FTC(the Federal Trade Commission has legal jurisdiction over the Hobby Protection Act) to make a ruling and hopefully clarify and update the HPA.
The HPA does not address the situation of an "original numismatic item" not actually exiting such as the case of the 1964-D Peace dollar. Since the US Mint records have confirmed the destruction of all 1964-D Peace Dollars(meaning that no original numismatic items exist), that may be a legal opening similar to the situation with the 1933 Farouk Double Eagle and the State Department export license. The HPA also needs to be revised to specifically address fantasy pieces, particularly the ones that use design elements of genuine US coins. The HPA was written in 1973, long before numismatics became a multi-billion dollar industry and before the Chinese and others decided to actively undermine to collector market to make a few more yuan, it is time for a modernized law.
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However, I think he might be in even more trouble with the law by making and having the dies themselves, since owning dies to make counterfeit coins which are "in likeness or similitude" to real coins is definitely illegal, and arguing that he didn't intend to use them on silver blanks but to non-fraudulently alter existing coins is irrelevant, because this law makes no mention of intent.
However, I think he might be in even more trouble with the law by making and having the dies themselves, since owning dies to make counterfeit coins which are "in likeness or similitude" to real coins is definitely illegal, and arguing that he didn't intend to use them on silver blanks but to non-fraudulently alter existing coins is irrelevant, because this law makes no mention of intent.
That is an especially interesting situation in light of the fact that the press DC uses is a Graebner Press that was used at the Denver Mint and then sold off as government surplus. If the government attempts to prosecute him for illegal dies, how will it resolve the fact that they were essentially accessories to his "crime" by supplying him with one of the necessary components for minting coins?

















