J.N. Hofzinzer invented the Coin Shell in the mid-1800s. Conrad Haden invented the Expanded Shell. Jim Boyd developed the Hopping Half trick in 1967.

 

Is it illegal to use real US coins to make magic tricks?
According to the U.S. Treasury F.A.Q., the answer is- No. It is only illegal to alter a US coin with the intention of spending it as if it were a coin of a different value.
From the website: "Section 331 of Title 18 of the United States code provides criminal penalties for anyone who 'fraudulently alters, defaces, mutilates impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the Mints of the United States.' This statute means that you may be violating the law if you change the appearance of the coin and fraudulently represent it [in a monetary transaction in trade for goods or services] to be other than the altered coin that it is. As a matter of policy, the U.S. Mint does not promote coloring, plating or altering U.S. coinage: however, there are no sanctions against such activity absent fraudulent intent."