Recognizes and hydrolyzes the peptide bond at the C-terminal Gly of ubiquitin. Involved in the processing of poly-ubiquitin precursors as well as that of ubiquitinated proteins. May be involved in the regulation of NF-kappa-B activation by TNF receptor superfamily via its interactions with RELA and TRAF2. May also play a regulatory role at postsynaptic sites. 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). Interacts with TRAF2 and RELA. In neuronal cells, it localizes to dendrites, as well as somas. Present in the brain, in particular in the postsynaptic density and the dendritic lipid raft fractions (at protein level). Belongs to the peptidase C19 family.