It's not illegal. You can continue to use it for as long as it works. However, Sky is currently rolling out replacement cards to all subscribers and cancelling old ones, so the card you have will cease working at some point over the next few months. When that happens you will have to contact Sky and ask for a FreesatFromSky card. They will charge you about £20 for this IIRC.
Or you could go and buy a basic, true Freesat box - more info at
www.freesat.co.uk or
www.joinfreesat.co.uk - and never have to worry about buying a replacement card ever again.