"Essentially it would consist of government programmers scouring the bitcoin code or a mixture of another method I will talk about later and inserting a bug into the code via infiltration and exploiting it. Most likely the exploitation would be used over a long period of time to achieve a specific goal without many noticing what is going on."

Otherwise known as Segregated Witness. Or SegWit2x.

I would also call regulation-strangulation their 4th option.