When Euro coins are damaged, they’re pulled from circulation and sold as scrap to Chinese dealers for their metal value—but it turns out that quite a few of them end up back in Europe, cashed in through change machine slots at face value.
Austrian authorities recently arrested and jailed an German citizen found with about 117kg of the scrapped one- and two-Euro coins. He had earlier been spotted pouring coins into a bank change machine in Bregenz and receiving paper money in return. He was convicted of fraud, but was acquitted in a verdict now confirmed by the court, which agreed with the man’s attorney that “my client was using a machine which is designed precisely to determine whether a coin is legal tender or not. So there can’t be any fraud.”
A 2012 ruling in Germany concluded that such coins could be legally exchanged at Germany’s central bank. With those rulings in mind, it seems likely that EU monetary authorities will be looking for a better way to dispose of damaged coins, perhaps by melting before sale, or chopping them up.
