I wouldn't know about competitions, but the game is mostly offline. You can get coins with meowth and lives with streetpass. I guess they could elaborate an algorithm that cheks sice last time you registered how many lives and coins you had, make some calculations and see if it was possible to obtain in a legit way. But I don't think they have any kind of counter of how many times you have played a given stage, so they can't really track coins.
I don't really think nintendo will do anything if you only give yourselve coins and lives. Just don't go to a competition with unreleased pokemon and those kind of things.
We don't know what kind of data does the game send to nintendo servers when it connects to them, I guess it could be sniffed by using a proxy server or whatever, but that kind of data analysys is something I can't do.
Also, don't enter a competition with 1000 coins, then enter it 5 minutes later with 99999. It could be possible by spending jewels, but those have to be bought...
If you want to invest 99999 in a competition, do a lot of runs in day one, then way until day 3-4 to go again with 99999, etc. But I don't think nintendo will put that much effort, they will focus on other kind of cheating.
