Place the chocolate chips, peanut butter, and butter into a medium-sized microwave-safe bowl.
Microwave for 30 seconds, stir. Microwave another 30 seconds, stir. Keep microwaving at 15-second intervals until smooth. Stir in the vanilla extract.
Place the cereal in a very large bowl. Add ⅓ of the chocolate mixture.
Stir to combine. Repeat 2 more times until the cereal is evenly coated.
In parchment-lined sheet trays, add 2 tablespoon-sized dollops of the cereal mixture, not touching onto the trays. I like to gently pack the cluster with the back of a spoon to make sure the cereal is sticking to itself.
Place in the freezer for 30 minutes or the fridge for 2 hours so they can harden.
Place the powdered sugar in a bowl. One at a time, place a cookie cluster in the powdered sugar and coat it. Tap off the excess and place the cookie back on the sheet tray. Repeat with the remaining cookies.