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Line a 9×13-inch dish with parchment paper and set aside.
Optional: In a small skillet, toast coconut over medium heat. Stir constantly to prevent burning and remove once coconut is slightly golden.
In a large microwave-safe bowl, add butter and marshmallows and microwave in 30 second increments, stirring between, until fully melted.
Stir in cereal and 1 ½ cups coconut until evenly coated.
Spoon mixture into the prepared dish and press into an even layer with a greased spatula. Sprinkle remaining coconut on top and press into the krispies.
