I believe it’s the first one. i’m truly sorry if it’s wrong
Which set up? Put a picture or something
"Creating fear in us" is a gerund verbal phrase. Option A is correct.
A gerund phrase always begin with a gerund,(an ing word), and may include other modifiers and/or objects. Gerund phrases always function as nouns, so they will be subjects, subject complements, or objects in the sentence. So, to put it simply, a gerund is a noun formed with a verb ending in ing. In this particular case the gerung in the sentence is the verb "creating;"(create+ing).
In the short tale "Emperor's New Clothes" by Hans Christian Andersen, the Emperor hires the swindlers because he loves wearing fancy clothes and a important procession is around the corner. These two swindlers promised him "the finest, best suit of clothes from a fabric invisible to anyone who is unfit for his position or hopelessly stupid". Since the Emperor's ministers didn't want to admit that they could not see the clothes, they lied to the Emperor. Eventually, the Emperor lied himself too and as a result he went naked to the procession.