Both clubs had signed off on the £40 million deal late on Tuesday night after Everton's medical staff raised concerns earlier in the process, only for the 25-year-old to walk away once the paperwork was in place.
Monaco chief executive Thiago Scuro explained the sequence of events on the club's YouTube channel on Wednesday, detailing how the American forward's medical in Liverpool triggered a lengthy dispute between the two clubs' medical departments before Everton ultimately cleared him to sign.
"During the day, we had a clear agreement for Balogun to go to Everton, Balogun flew to Everton to undergo a medical," Scuro said. "Balo was in Liverpool going through his medical, around 7 p.m. we had a call from Everton raising questions on the medicals of Balo, which for our medical staff, the personnel staff of the player, made totally no sense.
"The explanations were not enough to justify or bring concerns for the future of the player, this discussion started for medical departments, it took Everton two to three hours to check through the assessment, this is a normal situation."
Everton eventually signed off on the transfer, but Balogun refused to put pen to paper.
"I signed the contract, Everton signed the contract," Scuro said. "At the last moment, the player decided not to sign. Basically, Balogun's allegation is that I'm not feeling well because of the way the club treated me. I'm not feeling well because Everton's medical department raised doubts about my future or my health. I have nothing [no fitness or health issues], so I'm not comfortable signing a long contract here. And that's the way we finish our transfer window."
With the collapse leaving Monaco without the fee they were relying on, Scuro confirmed the club are still hopeful of moving Balogun on before markets close elsewhere, with Turkey, the United States and Saudi Arabia all still open for business.
"We are still waiting for Balo to come back so we can sit down and discuss what happens next between us," Scuro said.
Balogun has been a key figure for Monaco since joining from Arsenal in 2023 for a reported €30 million, scoring 13 goals and adding four assists in Ligue 1 last season on top of three goals for the United States at this summer's World Cup, where Mauricio Pochettino's side reached the round of 16.
His failed move leaves Everton short of attacking reinforcements, with Thierno Barry now their only recognised out-and-out striker following the summer sale of Beto to Fiorentina, piling further pressure on manager David Moyes ahead of a Premier League season already low on margin for error.