i never realized & only just found out its now illegal to buy & sell purple hearts in the US
Actually, it isn't. Ebay and others as always, takes everything to the extreme. "Banning" PH medals is no exception; they merely do not understand the intent of the law.

Here is the text of conversation from Senator Conrad, who initiated the bill:

Senator Conrad, Senate sponsor of the Stolen valor Act, read the following statement into the Congressional Record on 27 Feb.

Statement of Senator Kent Conrad
February 27, 2007

MR. CONRAD: Mr. President, I would like to comment today on the Stolen Valor Act of 2005 that was signed into law by President Bush on December 20, 2006. I am extremely proud of authoring the Senate version of this legislation that ultimately became law. The new law that has resulted from the Stolen Valor Act strengthens and expands the protections for our Armed Forces’ military service awards and decorations.

Since the Stolen Valor Act was signed into law, there have been reports of concerns raised by medals collectors, historians, museums, family members that inherit medals, and persons legitimately possessing, shipping, or selling military service awards and decorations. I would like to make it clear for the Record that the intent and effect of my legislation and the resulting law is only to provide the tools law enforcement need to prosecute those fraudulently using military service awards they did not earn through service to our Armed Forces. It does not in any way restrict legitimate possession, use, shipment, or display of these awards and decorations.

Before the law was enacted, my legislation was reviewed by the Senate Judiciary Committee, the House Judiciary Committee, the Department of Justice, and the Congressional Research Service’s American Law Division. All concluded that the Stolen Valor legislation does not negatively impact those legitimately in possession of military service awards and decorations.
Although the new law modifies Title 18 USC, Section 704, it does not impact the legitimate purchase, sale, or possession of medals. The key part of this passage is the phrase: "except when authorized under regulations made pursuant to law." That exception refers to 32 Code of Federal Regulations (CFR), Section 507. I believe the concerns raised by collectors and dealers of military medals and memorabilia may stem from lack of familiarity with the CFR and its relationship to statutory law. The CFR is the regulation that implements and administers statutory provisions, in this case, the provisions of 18 USC Section 704 as amended by the Stolen Valor Act.
The CFR specifically states in Section 507.12 “Mere possession by a person of any of the articles prescribed in Sec. 507.8 of this part is authorized provided that such possession is not used to defraud or misrepresent the identification or status of the individuals concerned.” According to numerous legal experts consulted on the drafting of the Stolen Valor legislation, “mere possession” would include: family members that inherit medals, museums, collectors, approved medals dealers, historians, and other persons in possession or selling medals that do not use them for fraudulent purposes. In addition, CFR Sec. 507.8(a) indicates, “the articles listed in paragraphs (a) (1) through (10) of this section are authorized for manufacture and sale when made in accordance with approved specifications, purchase descriptions or drawings.”

The articles listed as authorized for manufacture and sale in Sec. 507.8(a) include: decorations, service medals, ribbons, lapel buttons, and badges with the exception of the Medal of Honor. The CFR allows for the sale of all US medals (except the Medal of Honor) and insignia, provided that an official government manufacturer has made them and that the Institute of Heraldry (IOH) approved those pieces. Thus, the Stolen Valor Act does not in any way stop collectors or dealers from selling or collecting officially made medals and insignia, whether they were made yesterday or fifty years ago.

I ask Unanimous Consent that a memo from the American Law Division at Congressional Research Service supporting this analysis be included in the Record at the conclusion of my remarks.

In closing, I again want to assure those legitimately in possession of, selling, displaying, or shipping military service awards that the Stolen Valor Act is only directed at those who fraudulently use military service awards and decorations.

I have been to Walter Reed Hospital, Bethesda Naval Hospital, and have awarded numerous awards and decorations to soldiers and veterans. These brave men and women have given so much to ensure our freedoms. I strongly believe protecting the meaning and valor of military service awards is a very important way we can continue to honor their service and sacrifice. "