Add all but 2 tablespoons of unsweetened shredded coconut to a large bowl.
Add the powdered sugar and whisk until combined.
Then, add the sweetened condensed milk and vanilla extract. Stir until a dough forms.
Let the dough chill for about 20 minutes in the refrigerator to firm up.
Once scoopable, use a small ice cream or cooked dough scoop to scoop the coconut mixture into 1 tablespoon sized balls. Roll the balls between your hands to make them smooth.
Place the coconut balls on a parchment lined baking sheet. You should get about 36 coconut balls.
Refrigerate the coconut balls for at least an hour.
Add the chocolate chips and coconut oil to a microwave-safe bowl.
Microwave in 30-second increments, stirring in between, until the chocolate is melted. This should about 60-90 seconds total.
Use a fork to dip the coconut balls into the chocolate mixture, tapping any excess chocolate off the coconut balls.
Place the dipped coconut bites back onto the prepared baking sheet and immediately sprinkle with the remaining shredded coconut.
Let the chocolate set for about 30 minutes before serving. Chill until ready to serve.