In statement, secretary general Randu Nzai said the allegation by Interior Cabinet Secretary Joseph Nkaissery is unfounded.
On Tuesday, the CS said intelligence by the police shows proceeds from poaching are used to finance terrorism and the MRC’s activities.
Nkaissery linked the latest consignment of ivory seized in Singapore and Thailand to the MRC.
He said it was meant to finance and facilitate their criminal activities.
Three elephant tusks were found at a Thai port stashed in a tea container shipped from the Port of Mombasa.
“We are not engaging in wildlife trophies. This has been a government plot to associate the group with illegal activities as an excuse to arrest and execute officials and members,” Nzai said.
He said the group will continue agitating for the Coast region to secede through the legal process.
The state has in the past linked MRC to al Shabaab terror group.
It has accused it of orchestrating last year’s terrorist attack in Lamu, where more than 100 people were killed.
Intelligence reports indicate Somalia’s al Shabaab militia is partly funded by illegal wildlife trade.
Eleven suspects have been arrested by Thailand and Singapore authorities in connection with the ivory haul.
The main suspect and his two sons were arrested on Thursday last week and detained at the Port police station.
Police want to hold them for 20 days to enable them complete investigations.
An inter-agency team and Interpol are probing the smuggling and trying to apprehend accomplices, including exporter Samuel Jefwa believed to be hiding in Uganda.