but i have no money in my paypal account and they cant take money from my bank or credit card...can they?
HOw did this guy pay for the item? Did he pay with PayPal and you already deposited the money into your account? If so, if he's smart, he'll open a complaint with PayPal. A series of questions will be sent to you and him and it'll be his word against yours.
After viewing your listing, you made no mention of any cracks or other wear and tear on the phone. It would be up to the buyer to request additional photos of the phone. If it were me, I'd ask for detailed hi-res photos of a phone prior to dropping $300 plus on it. Shame on him.
However, the "dispute" between you and him via Paypal almost always results in the bidder winning. While you never stated the condition of the phone but did mention that it was in perfect working order, his complaint of the phone being scratched or cracked might not hold up.
If he paid with Paypal and it's linked to either your credit card or bank account, if he opens up a dispute on this item and you lose that dispute, Paypal can take out the money automatically in order to resolve this issue.
What I would recommend is that you contact the buyer, ask him to take pictures of the phone and detail the crack he found and ask him to send it to you. Unfortunately, your pics aren't that great in the listing so it might not favor your case but at least you'd have some documentation of what his complaint is. My guess is that, since the phone is white, the crack, if there is one, won't show up that much if at all so if it heads to a dispute, you can show that photo of where the supposed crack is and Paypal can ultimately decide for themselves.
Worst case, tell him to send the phone back to you first prior to refunding his money otherwise you'll be SOL.