Deubiquitinating enzyme (DUB) that controls levels of cellular ubiquitin through processing of ubiquitin precursors and ubiquitinated proteins. Thiol protease that recognizes and hydrolyzes a peptide bond at the C-terminal glycine of either ubiquitin or NEDD8. Has a 10-fold preference for Arg and Lys at position P3, and exhibits a preference towards 'Lys-48'-linked ubiquitin chains. Deubiquitinates ENAC in apical compartments, thereby regulating apical membrane recycling. Indirectly increases the phosphorylation of IGFIR, AKT and FOXO1 and promotes insulin-signaling and insulin-induced adipogenesis. Required for stress-response retinal, skeletal muscle and germ cell maintenance. May be involved in working memory. Can hydrolyze UBB(+1), a mutated form of ubiquitin which is not effectively degraded by the proteasome (By similarity). Thiol-dependent hydrolysis of ester, thioester, amide, peptide and isopeptide bonds formed by the C-terminal Gly of ubiquitin (a 76-residue protein attached to proteins as an intracellular targeting signal). Inhibited by monoubiquitin and diubiquitin. Preferentially binds diubiquitin; the interaction does not hydrolyze diubiquitin but, in vitro, inhibits the hydrolyzing activity on other substrates. Belongs to the peptidase C12 family.