Swedish prosecutors said Friday they have dropped a seven-year probe into allegations of rape against Julian Assange, but the WikiLeaks founder is likely to remain holed up in the small office in Ecuador’s embassy in London where he has been for nearly half a decade.

Mr. Assange’s lawyers said the Swedish decision did little to assuage their main fear—that U.S. authorities would seek his extradition to face charges for leaking thousands of classified government documents.

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