Deubiquitinating enzyme that functions as a negative regulator of the innate immune system (PubMed:17991829, PubMed:22245969, PubMed:23827681, PubMed:33523931). Has peptidase activity towards 'Lys-48'- and 'Lys-63'-linked polyubiquitin chains (PubMed:22245969). Can also cleave 'Lys-11'-linked ubiquitin chains (in vitro) (PubMed:22245969). Acts via TRAF3 deubiquitination and subsequent suppression of type I interferon (IFN) production (PubMed:17991829). Controls neuroectodermal differentiation through cleaving 'Lys-48'-linked ubiquitin chains to counteract degradation of select chromatin regulators such as ARID1A, HDAC2 and HCF1 (PubMed:33523931). Acts as a positive regulator of mTORC1 and mTORC2 signaling following phosphorylation by MTOR: acts by mediating deubiquitination of BTRC, leading to its stability (PubMed:33110214). {ECO:0000269|PubMed:17991829, ECO:0000269|PubMed:22245969, ECO:0000269|PubMed:23827681, ECO:0000269|PubMed:33110214, ECO:0000269|PubMed:33523931}. This is the function of OTUD5 (OTU deubiquitinase 5, Ensembl gene identifier ENSG00000068308).