Looking For Advice - Unauhtorized Payment

Sorry that I'm looking for a bunch of advice here!
Well, today, I took payment for some Can YCHs that I'm doing, which can be used as badges. The client wanted two, I sent them sketches and accepted payment.

While working, I noticed they filed a dispute on me, labeling it as an unauthorized payment, it's put into "Being Reviewed By Paypal" on the resolution center. I contacted the client saying that I won't complete or continue working, as I do not want myself to be swindled.

Now, what am I doing against this dispute? Do I wait it out? This is the first time it happened to me.