Make the dough by combining water, yeast, sugar, flour, salt, and arak in a mixing bowl with a dough hook. Knead on medium-high speed for 8 minutes until a sticky, slightly soft dough forms. Transfer to a greased bowl, cover, and let rise until doubled in size, about 1 hour.

Heat the oil in a wide, shallow pot over medium heat (or 340°F/170°C if using a thermometer).

With slightly wet hands, pinch off pieces of dough, shape lightly, and poke a hole in the center. Carefully fry in the hot oil for 2 minutes per side until golden.

Remove to a plate lined with paper towels. Immediately toss each sfinge donut in sugar to coat evenly.