Yes, it is illegal to purposely deface money. However, the U.S. government will replace worn out or damaged money if three-fifths of it is still identifiable. Two-fifths will earn the bearer half the face value; less than that gets nothing.

In any case, until the 100th anniversary of Abraham Lincoln's birth, there wasn't a coin one could "deface." That was when the first U.S. portrait coin, the Lincoln penny, was issued.

The one thing every American coin has had since the Revolutionary War is a design with some symbol of liberty on it.