The purge of Princess Srirasmi's family over the past 10 days has been widely reported in Thailand.
However, until now the severity of the lese majeste law criminalising any critical comment about the monarchy meant that no Thai media had pointed out the family connection.
The princess's uncle, a senior police general, was arrested over accusations of amassing vast wealth through smuggling and gambling rackets.
Four of her siblings and two other relatives have also been held.
The office of Crown Prince Vajiralongkorn has now sent a letter to the interior ministry ordering her family to be stripped of the royal name he bestowed on them when he married her.
The dramatic downfall of Princess Srirasmi comes at a very sensitive time, analysts say, with the 86 year-old King Bhumibol Adulyadej in poor health.
As the Crown Prince's wife, she would have been expected to become Queen when he succeeds his father, a potentially very powerful position given the exalted status of the monarchy in Thailand.
The pivotal position of the monarchy in Thailand's political order makes the succession an extremely sensitive issue, many aspects of which still cannot be reported from inside the country.
The world's longest-reigning monarch, King Bhumibol has been on the throne in Thailand since 1946.