They have been gold-plated, hammered into lockets and painted with enamel to look like stained glass, but it is illegal to turn Singapore coins into jewellery.

The Monetary Authority of Singapore (MAS) told The Straits Times on Thursday that it had lodged a police report in 2014, after it discovered that people had been making such trinkets and selling them on US-based craft website Etsy, sometimes for thousands of dollars.

Under the Currency Act, it is illegal to "mutilate, destroy or deface" Singapore currency, including painting, engraving or cutting into coins. Offenders can be fined up to $2,000, and police are investigating.

The sale of Singapore coin jewellery is not new, with one vendor claiming his Singapore 10-cent earrings, which sell for $125 a pair, have been a "best-selling" item since he began making them 38 years ago.

A search of "Singapore coin jewellery" on the site yielded almost 200 results, with most pieces using coins from the first series issued by the Board of Commissioners of Currency from 1967 to 1985.

Known as the marine series, it features designs of the seahorse, swordfish and lionfish.

Several sellers also used coins from the floral series, produced from 1985 to 2012, featuring flowers like the periwinkle and yellow allamanda.

Apart from lockets and earrings, local coins have also been turned into cuff links, necklaces and rings.

Modifications range from holes punched through the coins to silver soldering, annealing (heat treatment) and tumble polishing.

Prices go from $4 for a pair of earrings to $2,497 for a pendant containing a 1983 gold proof commemorative coin.

All the sellers are based overseas, with most in Britain and the United States, and are using these techniques to make jewellery from coins around the world.

Many told The Straits Times that they bought their Singapore coins from local coin dealers, coin shops, or on eBay.

Mr Steve Patmore, 62, owner of CoinArte on Etsy, said: "The sea- horse is a beautiful creature and the design on the Singapore coin is a particular favourite." He added that sales of Singapore coin pendants and cuff links have been steady, with many international buyers.

Many sellers added they were unaware that making Singapore coins into jewellery is illegal.

A British seller, who wanted to be known only as Myron, said: "I obviously don't want to disrespect regulations, so I will have a look at the relevant law and make a decision if I will continue selling these pieces.

"Having said that, I don't think that the UK will extradite me to stand trial."

A seller from the US, who only wanted to be known as Cliff, said: "It might be illegal in Singapore, but it isn't illegal in this country."

Australia and Canada have similar laws prohibiting the defacing of coins. While it is not illegal to turn coins into jewellery in the US and Europe, the practice is not encouraged.

Lawyer Amolat Singh said that since Singapore's laws do not have extraterritorial jurisdiction, it is unlikely that these overseas sellers will face penalties, as defacing currency is not a major offence that warrants assistance from other governments.

But he added that the police might have greater power than MAS when investigating the issue.

Etsy did not respond to queries about whether it would require the sellers to remove these items.

Correction note: An earlier version of the story stated that MAS had lodged a police report last Thursday. The report was actually made in 2014. Also, MAS clarified that the coins used to make the jewellery were from the first series issued by the Board of Commissioners of Currency.