This is one weird matchup for me. I've noticed a trend with most Arakune players that I've fought online.. it seems that when you're NOT cursed, they attempt to do some nice combos on you in order to set you up to be cursed, but once they do curse you it feels like they start just frantically mashing on the buttons. At max distance, Arakune has very few options to curse you with, that aren't ridiculously easy to see coming and slash away.
The strategy I've used in most of the vs Arakune matches I've won, is to advance very carefully, slashing through anything he tries to curse you with. Once I get ahead in damage and as long as I'm not cursed, I back away as far as I can get and just wait for him to advance on me. Playing at Hakumen's tempo and on his terms is one of the keys to winning this one. An Arakune that has no curses on you and tries to close in to duke it out with you is going to get trashed, since Hakumen can unload a ton of damage in a very short period of time. 2C is my most commonly used move in these fights, since it takes care of clouds above you and if an Arakune is trying to come down from above. 6B is useful as well, especially against Arakunes that try to use that annoying swimming-through-ground attack. This fight is still definitely in Arakune's favor, but as time goes on I think I'm getting better at knocking the crap out of this annoying blob. You don't get many opportunities to get close to Arakune, so when you close in you have to unload everything you've got. Hakumen's massive damage output in relatively short combos makes this easier.