Unmanned Aerial Vehicles (UAVs) have quickly become one of the promising Internet-of-Things (IoT) devices for smart cities. Thanks to their mobility, agility, and onboard sensors’customizability, UAVs have already demonstrated immense potential for numerous commercial applications. The UAVs expansion will come at the price of a dense, high-speed and dynamic traffic prone to UAVs going rogue or deployed with malicious intent. Counter UAV systems (C-UAS) are thus required to ensure their operations are safe. Existing C-UAS, which for the majority come from the military domain, lack scalability or induce collateral damages. This paper proposes a C-UAS able to intercept and escort intruders. It relies on an autonomous defense UAV swarm, capable of self-organizing their defense formation and to intercept the malicious UAV. This fully localized and GPS-free approach follows a modular design regarding the defense phases and it uses a newly developed balanced clustering to realize the intercept- and capture-formation. The resulting networked defense UAV swarm is resilient to communication losses. Finally, a prototype UAV simulator has been implemented. Through extensive simulations, we demonstrate the feasibility and performance of our approach.