Measure cereal into large bowl.
Microwave chocolate chips, peanut butter and butter for 1 minute, then for another 30 seconds.
Stir mixture until smooth.
Stir in vanilla.
Pour mixture over cereal, stirring until evenly coated.
Pour into resealable food bag.
Add powdered sugar. Seal bag; shake until well coated.
Spread on wax paper to cool. Store in airtight container in fridge.