Drop peanuts into a blender a few at a time; chop to a meal like consistency. Pour chopped peanuts on a plate or platter and set aside.
Combine cornstarch, salt and sugar; add sherry and mix. Stir into the lightly beaten egg whites.
Dip chicken slices into the sherry-egg mixture to coat; then roll in peanuts. Preheat oil to 375° F. Drop about 8 or 10 chicken slices into the hot oil at a time. Fry 2 to 3 minutes turning until all sides are golden brown. Drain on paper towels. Serve hot as appetizers. Maybe served plain or with a sweet and sour sauce.