Hydrolase that can remove conjugated ubiquitin from proteins in vitro and may therefore play an important regulatory role at the level of protein turnover by preventing degradation. Regulator of T-cell anergy, a phenomenon that occurs when T-cells are rendered unresponsive to antigen rechallenge and no longer respond to their cognate antigen. Acts via its interaction with RNF128/GRAIL. Surprisingly, it regulates RNF128-mediated ubiquitination, but does not deubiquitinate polyubiquitinated RNF128. Deubiquitinates estrogen receptor alpha (ESR1). Mediates deubiquitination of Lys-48-linked polyubiquitin chains, but not Lys-63-linked polyubiquitin chains. Not able to cleave di-ubiquitin. Also capable of removing NEDD8 from NEDD8 conjugates, but with a nuch lower preference compared to Lys-48-linked ubiquitin.