Where Is The Line Drawn For Counterstamp Legality?

I didn't think it was legal at all, just overlooked.

Over the years, I've seen about any obscenity you can think of. I think the denomination

with the most, would be the various lg. cent pieces.

It is all very well to speculate, but what is the wording in the US law about altering/ defacing coins?

In Canada, the criminal code says that it is an offence to "deface a current coin", although I cannot locate the legal definition of defaced.

Title 18, section 475 is the code that prohibits advertising on currency: "Whoever designs, engraves, prints, makes, or executes, or utters, issues, distributes, circulates, or uses any business or professional card, notice, placard, circular, handbill, or advertisement in the likeness or similitude of any obligation or security of the United States issued under or authorized by any Act of Congress or writes, prints, or otherwise impresses upon or attaches to any such instrument, obligation, or security, or any coin of the United States, any business or professional card, notice, or advertisement, or any notice or advertisement whatever, shall be fined under this title."

https://www.law.cornell.edu/uscode/text/18/475

Section 331 covers fraud (as discussed here); 333 covers malicious mutilation (i.e. destruction, or rendering currency otherwise unusable).

Edit to clarify defacing (copied from the Law.Cornell site linked above):

Section 331:

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.

Section 333:

Whoever mutilates, cuts, defaces, disfigures, or perforates, or unites or cements together, or does any other thing to any bank bill, draft, note, or other evidence of debt issued by any national banking association, or Federal Reserve bank, or the Federal Reserve System, with intent to render such bank bill, draft, note, or other evidence of debt unfit to be reissued, shall be fined under this title or imprisoned not more than six months, or both.

It isn't illegal to alter coins unless fraud is involved.

Several years ago Pres. Obama pardoned a man who was convicted in the 1960's of filing down pennies to pass as dimes in vending machines.

The man had plead guilty to "coin mutilation" and the pardon got a lot of publicity.

Sure you were.

In case anyone wonders, those are United States laws. In Canada it is illegal to deface a current coin; intent is not part of the law. However, Canadians can deface US coins!