Assange — who has denied both accusations — is still suspected of molesting a woman on Aug. 13, but molestation is not a sex crime under Swedish law, said Karin Rosander, a spokeswoman for the Swedish Prosecution Authority.
It covers a wide range of offenses, including reckless conduct or inappropriate physical contact with another adult, and can result in fines or up to one year in prison.
Chief Prosecutor Eva Finne formally closed another case involving a woman who claimed Assange had raped her. Finne had dismissed the rape charge over the weekend and recalled a short-lived arrest warrant. She decided Wednesday that the case couldn't be prosecuted as any other type of sex crime either.
"The investigation is therefore closed in regard to this complaint since there is no suspicion of a crime," Finne said in a statement.
Assange was in Sweden partly to seek legal protection for WikiLeaks, an online whistle-blower that has angered the Obama administration by publishing thousands of leaked documents about US military activities in Iraq and Afghanistan. The group says it has computer servers in Sweden and other countries.
Assange and his group suggested that the accusations, coming as WikiLeaks prepares to release a new batch of classified documents, were part of a smear campaign. In an interview with a Swedish newspaper, Assange even pointed a finger at the Pentagon, which has warned WikiLeaks that the leaked documents could endanger US soldiers and their Afghan helpers.
Pentagon press secretary Geoff Morrell on Sunday called Assange's charges "absurd." The lawyer representing both women, Claes Borgstrom, also dismissed any foreign involvement in their complaints.
"There is not an ounce of truth in all this about Pentagon, or the CIA, or smear campaigns, nothing like it," Borgstrom told Swedish news agency TT.
Borgstrom criticized the prosecutor's decision, saying both complaints should be investigated as sex crimes.
Investigators have not released details about either case, though a police report obtained by The Associated Press shows both women had befriended Assange in connection with a seminar he gave in Stockholm on Aug. 14.
The report shows they filed their complaints together six days later.
An on-call prosecutor issued an arrest warrant for Assange on suspicion of rape later that day, but Finne revoked it within 24 hours saying it wasn't a rape case.
Assange's lawyer Leif Silbersky lashed out at prosecutors for the way they handled the case, especially that they identified his client by name to the media.
"He has been cast as a rapist, labeled as a rapist and the international press have described him as a suspected rapist and now he has ended up in a situation where they have dispelled the sexual parts and what remains is molestation," Silbersky said.
