"That's the requirement of most of these hackers," the founder, chairman and CEO told "Mad Money" host Jim Cramer on Tuesday. "Many companies choose to buy bitcoin in some state or fashion and pay them off."
Bitcoin, an increasingly popular cryptocurrency, has surged in price in 2017, having climbed nearly 300 percent year to date.
As hacks become more sophisticated, they manage to infiltrate the top tiers of companies, forcing their hands into buying the unregulated currency and using it for ransom.
Mokady said that the efforts of companies like his to teach companies about how to prevent cyberattacks are especially stymied in Europe, where firms are not required to disclose when or how many times they were breached.
Starting in 2018, disclosure will become a requirement, which should benefit cybersecurity companies like Mokady's as well as those at risk of cyberthreat, the CEO told Cramer.
"They will actually have to disclose when they are breached and we think that will expedite the education process of cyberattacks," Mokady said.
But with the threat still at large, the CEO said CyberArk's main focus is devoted to educating its clients about best processes and preventative measures when it comes to hacking.
"The enterprises that we see and work with are actually trying to be smarter than [those who buy bitcoin for ransom] and learn from other companies' mistakes and put in the means to prevent such attacks from really taking them down," Mokady told Cramer.