Option (C) is the correct answer. The provided context explicitly states that the insect-resistant transgenic crop Bt cotton was developed by transferring the Bt gene (also called cry gene) from the bacterium Bacillus thuringiensis into a cotton plant. The text further clarifies that this bacterium naturally produces the Bt toxin encoded by these genes. Options (A), (B), and (D) are incorrect as the context identifies the specific source of these genes as Bacillus thuringiensis.