In a saucepan, melt together the chocolate chips and peanut butter over medium-low heat. Remove from heat when about 90% of the chocolate chips are melted. Continue stirring until smooth and fully melted.
Pour chocolate peanut butter mixture over the cereal in an extra large bowl. Use two spatulas or large spoons to carefully mix this together. You want all of the cereal coated but not crushed up.
In a large bag, pour powdered sugar and cereal mixture and close tight to shake. Shake up the cereal until it is heavily coated with powdered sugar. Pour out onto a sheet pan to dry and cool and enjoy! It only takes about 20-30 minutes for the chocolate to set.